Croatia: GDP contracts at slightly faster pace in Q2
September 12, 2014
GDP contracted 0.8% in Q2 over the same quarter last year, according to detailed figures released by the Croatian Bureau of Statistics on 12 September. The decline was in line with the 29 August flash estimate and marked a slight deterioration over the 0.7% contraction tallied in Q1. The print represented the fastest pace of contraction since Q4 last year and the 11th consecutive quarter of declining economic activity.
Q2’s deterioration reflects that an improvement in the external sector was more than offset by a drop in domestic demand. Domestic demand fell from Q1’s 1.1% decrease to a 2.7% contraction in Q2. Private consumption declined 0.6% over the same quarter of last year (Q1: -0.5% year-on-year), and government spending fell 3.4% (Q1: -2.2% yoy). Gross fixed capital formation fell further from Q1’s 3.6% annual decline to a 5.2% contraction in Q2.
On the external side of the economy, exports of goods and services grew 7.9% in Q2, which represented a slowdown over the 11.4% growth recorded in Q1. Imports rose 2.2% (Q1: +7.6% yoy). As exports’ growth outpaced imports’ growth, the external sector’s net contribution to overall economic growth increased from plus 0.4 percentage points in Q1 to plus 2.0 percentage points in Q2.