ZAGREB, November 9, 2018 – According to working-day adjusted data, household consumption in September 2018 rose 0.4% from the previous month and by 3.9% from September 2017, the national statistical office (DZS) said in a report on retail sales on Thursday.
The consumption growth rate in September was higher than in August, when consumption grew 3.1% year on year.
The September increase in consumption is a continuation of a record positive trend, considering that an annual drop in consumption was last registered in August 2014. This is the first time since the DZS started keeping record of household consumption statistics that consumption has grown for the 49th consecutive month.
In the first nine months of this year retail sales grew 3.6% in real terms from the same period of last year.
This shows that the national economy continues to be based predominantly on services related to commerce and tourism, Raiffeisenbank Austria (RBA) analysts said in a comment on the DZS statistics.
They expect retail sale growth to continue at solid rates in the coming months, owing to very good post-season tourism results, declining unemployment, a mild rise in employment and higher consumer confidence.
RBA analysts expect that, in the context of a still moderate inflation and low refinancing costs, disposable income will continue growing.
Croatia’s exports amounted to 79 billion kuna in the first nine months of this year, rising by 4% compared to the corresponding period in 2017, whereas imports reached 130.3 billion kuna, up 6.1%, according to preliminary figures released by the State of Bureau of Statistics (DZS) on Thursday.
The foreign trade deficit came to 51.3 billion kuna, up 4.5 billion kuna year on year, and coverage of imports by exports fell from 61.9% to 60.6%.
Exports to EU countries totalled kuna 54.2 billion, climbing by 10.2% compared to the first nine months of 2017. Exports to non-EU countries dropped by 7.3% to 24.8 billion kuna.
Imports from EU countries increased by 6% to 101.5 billion kuna and those from non-EU countries rose by 6.8% to 28.9 billion kuna.
Expressed in euro, Croatia’s exports came to 10.6 billion euro, up 4.3% over the January-September period of 2017, and imports went up by 6.4% to 17.6 billion euro. As a result, the foreign trade deficit totalled 6.3 billion euro.
Total deposits with Croatian commercial banks reached 288 billion kuna at the end of September 2018, increasing by 14 billion or 5.2 percent from September 2017, Raiffeisenbank Austria (RBA) said in an analysis of central bank (HNB) data on Thursday.
This marked a continuation of the growth trend which began in December 2011, mostly thanks to a strong increase in demand deposits.
Demand deposits, which include funds in current and giro accounts and banks’ obligations arising from kuna payment instruments issued, exceeded 86 billion kuna in September, up 23.8 percent over the same month last year.
On the other hand, total savings and time deposits have been on the decline since October 2016. At the end of September 2018, they stood at 202 billion kuna, down 1.1 percent from September 2017.
The fall in savings and time deposits is the result of a fall in foreign currency deposits, as kuna-denominated savings and time deposits rose both on monthly and annual levels, exceeding 35 billion kuna, RBA said.
On the other hand, foreign currency savings and time deposits, which account for about 82 percent of all savings and time deposits, fell by 1.5 percent to kuna 166.5 billion year on year.
The structure of and trends in deposit amounts clearly show a greater inclination to holding liquid assets, which is certainly motivated by record-low interest rates on savings, RBA said, adding that this is the result of high liquidity in the financial system thanks in part to the central bank’s expansionary monetary policy measures.
RBA said that the Croatian financial system would be marked by high liquidity throughout 2018, which along with modest lending growth rates implied a continuation of low passive interest rates. As a result, increased savings are likely to be directed more into demand deposits and less into savings and time deposits, it concluded.
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