Croatia’s GDP Growth Expected to Accelerate Slightly

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The Zagreb Economics Institute expects accelerated GDP growth in the second quarter.

On the basis of the trend of the CEIZ index for June, analysts of the Zagreb Economics Institute (EIZ) expect that the real GDP growth in the second quarter of this year reached 2.6 percent compared to 2016, while seasonally adjusted data point to GDP growth in the second quarter of 0.8 percent when compared to the first quarter, reports on 8 August 2017.

“In June this year, the CEIZ index dropped by 0.4 points compared to the same period last year, which is the smallest annual decrease in the value of the index this year. After a very low CEIZ value ​​in April, which was mostly a consequence of a substantial fall of industrial output and lower VAT revenues, the index increased cumulatively by 0.6 points in May and June, which means that, compared to the first quarter, the CEIZ index increased in the second quarter, suggesting an improvement in the business cycle,” announced the EIZ.

At the same time, all components of the CEIZ index have risen on an annual basis, in particular, the number of tourist arrivals, which increased by 33.4 percent year-on-year by June. The smallest positive contribution to the growth of the index in June was given by industrial output, which grew by just 0.5 percent.

Measured on an annual basis, CEIZ’s value suggests an acceleration of economic activity, albeit at lower rates than last year. “Based on the trend of the CEIZ index, we expect the real GDP growth rate to reach 2.6% in the second quarter of 2017 compared to the same period last year, which is a slight acceleration compared to the first three months of the year, when GDP grew at a rate of 2.5 percent,” reported the EIZ.

The CEIZ index is a coincidental economic indicator, a monthly complex business cycle indicator developed by the EIZ, with the purpose of providing timely information on the current business cycle, which is why the value of the CEIZ index changes at the same time as the economic cycle.

The index is an indicator which contains information that would otherwise have to be collected by analysing a large number of different economic series and, unlike the quarterly GDP data, the CEIZ index provides a monthly estimate of the status of the economy.

The CEIZ index is available one to three months before the publication of data on quarterly GDP, which is why economic policy makers are able to keep track of economic trends in a timely manner.

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