Croatia: GDP contracts for seventh consecutive quarter in Q2
September 10, 2013
In the second quarter, GDP contracted 0.7% over the same quarter last year, according to detailed figures released by the Croatian Bureau of Statistics on 10 September. While the decrease was in line with the 30 August flash estimate and marks an improvement over the 1.5% contraction tallied in the previous quarter, it also represents the seventh consecutive quarter of declining economic activity.
Domestic demand drove the improvement tallied in the second quarter, whereas the external sector deteriorated compared to the previous quarter. Private consumption rose 0.5% over the same quarter last year, contrasting the 3.0% decline observed in Q1, while government spending expanded 1.3% (Q1: +0.3% year-on-year). Gross fixed capital formation rebounded to a 0.9% increase (Q1: -2.3% yoy), marking the highest print since Q4 2008.
On the external side of the economy, exports of goods and services rose 0.8% in the second quarter, contrasting the 4.9% decline seen in Q1. Imports expanded 4.9% over the same period last year (Q1: -5.6% yoy). As a result, the external sector's net contribution to overall economic growth swung from plus 0.8 percentage points in the first quarter to minus 1.5 percentage points in the second quarter.
The government is adamant that the economy will expand 0.2% this year and 1.3% in 2014. FocusEconomics panelists' assessment is more pessimistic; they expect GDP to contract 0.8% in 2013, which is unchanged from last month's estimate. In 2014, the panel expects economic growth to rebound to 0.8%, which is down 0.1 percentage points over the previous month's estimate.