Croatia: Pace of GDP contraction eases in Q3
December 10, 2013
GDP contracted 0.6% over the same quarter last year in Q3, according to detailed figures released by the Croatian Bureau of Statistics on 10 December. The decline was in line with the 29 November flash estimate and marks an improvement over the 0.8% contraction tallied in the previous quarter. Although the print represented the softest contraction since Q4 2011, it also marked the eighth consecutive quarter of declining economic activity. The improvement tallied in Q3 was driven by external demand, whereas domestic demand deteriorated compared to the previous quarter. Private consumption rose a meagre 0.2% over the same quarter last year (Q2: +0.4% year-on-year), while government spending contracted 0.9% (Q2: +1.4% yoy). Gross fixed capital formation grew 0.3%, which was below the 0.9% increase tallied in Q2. On the external side of the economy, exports of goods and services contracted 1.3% in Q3, contrasting the 1.4% increase seen in Q2. Imports dipped 1.6% over the same period last year (Q2: +5.5% yoy). As a result, the external sector's net contribution to overall economic growth rose from minus 1.6 percentage points in Q2 to minus 0.1 percentage points in Q3. The government expects the economy to 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 0.7%, which is also unchanged over the previous month's estimate.