Next week the State Bureau of Statistics will publish its first estimate of gross domestic product (GDP) for the fourth quarter of 2015
Thanks to the strengthening of consumption, exports and investment, economists estimate that Croatian economy in the fourth quarter of last year grew by more than 2 percent, Jutarnji list reported on February 21. 2016. At the end of next week, the State Bureau of Statistics will publish its first estimate of gross domestic product (GDP) in the fourth quarter of 2015, and eight macroeconomists who participated in a survey conducted by HINA estimated on average that the economy grew by 2.1 percent compared to the same period last year. Their growth estimates range from 1.8 to 2.6 percent.
That would be the fifth consecutive quarter of GDP growth. In the third quarter of 2015, the economy grew by 2.8 percent year on year, which was the highest rate of growth since the second quarter of 2008.
The economists claim that the main reason for the continued economic growth is the strengthening of private consumption, which is the largest component of GDP. This is indicated by the rise of turnover in retail trade for 17 consecutive months, which has not happened since 2007. In the fourth quarter, retail sales grew by 3.2 percent, making it the fastest rate of growth since the third quarter of 2007. The growth of consumption was a consequence of tax changes introduced in early 2015, which resulted in the growth of wages. According to data, in the first 11 months of last year, the average net monthly salary amounted to 5,705 kuna, which was 3.9 percent more compared to the same period in 2014.
“In addition to tax changes and the absence of inflationary pressures, the growth in retail sales is certainly a consequence of the extension of the tourist season and of the stopping of the negative trends in the labour market”, said one of the economists.
Growth in exports also had a positive influence on the economy. According to data, Croatia in 2015 exported goods worth 87.6 billion kunas, which was 10.7 percent more than in 2014. This is mainly thanks to economic growth in the European Union, which is the largest Croatian foreign trade partner. At the same time, imports have increased by 7 percent, reaching 140 billion kunas. “We expect a positive contribution from net exports to GDP, but probably not as strong as in the third quarter”, said one of the economists.
Most economists also expect continued growth of investments, which rose by 2.2 percent in the third quarter of last year. “We expect positive developments in investment activities, given that construction activity indicates the end of the downturn while the use of EU funds has improved.”
Whatever the reasons, 2015 will be the first year of economic growth after six years of recession, and the GDP is expected to continue to grow this year as well. The European Commission expects that Croatia’s GDP will grow by 2.1 percent this year. The Croatian National Bank believes that the rate of growth will be around 1.8 percent. The eight macroeconomists in Hina’s poll are somewhat more cautious, and on average they expect economic growth of 1.2 percent, with their estimates ranging from 1 to 1.5 percent.
