Croatia: Economy expands in second quarter
September 20, 2011
In the second quarter, GDP rose 0.8% over the same period last year, according to revised data from 20 September. The reading confirmed the 26 August preliminary estimate and contrasted the 0.8% contraction observed in the first quarter. In fact, the reading followed two consecutive quarters of contracting economic activity. The second quarter improvement was driven by positive developments in the external sector, while domestic demand deteriorated over the previous quarter. Private consumption bounced back in the second quarter and grew 0.6% (Q1: -0.1% year-on-year), while government consumption increased 1.7%, which contrasted the 0.9% contraction in the first quarter. On the other hand, gross fixed investment contracted 7.3% in Q2, sharper than the 6.7% drop registered in the first quarter. Fixed investment has been contracting since the first quarter of 2009. Exports of goods and services swung from an 11.1% contraction in the first quarter to 1.1% expansion in the second. In contrast, imports declined 6.0% in the second quarter, sharper than the 5.3% drop witnessed in the first quarter. As result, the net contribution from the external sector to overall economic growth swung from a 1.1 percentage-point detraction in the first quarter to a 3.4 percentage-point contribution in the second quarter.