Surprisingly high estimates of Croatia’s GDP growth in the first quarter of 2016.
Thanks to the growth of consumption, industrial production and investments, as well as positive contribution of tourism, macroeconomists estimate that the growth of the Croatian economy in the first quarter accelerated to more than 2 percent, reports Jutarnji List on May 29, 2016.
The Central Bureau of Statistics will announce on Tuesday its first estimate of gross domestic product (GDP) growth in the first quarter, and eight macroeconomists who participated in a survey estimated on average that the economy grew by 2.4 percent compared to the same period last year. Their growth estimates vary in the range of between 2.0 and 2.8 percent.
It would be sixth quarter in a row that GDP is growing, and more quickly than in the previous quarter when the economy grew by 1.9 percent year on year.
The surveyed macroeconomists indicate that the economic growth is accelerating mainly thanks to strengthening of private consumption, which is the largest component of GDP. This is indicated by the rise of turnover in retail trade for 19 consecutive months, which has not been recorded since 2007. In the first quarter of this year, retail sales increased by 3.2 percent compared to the same period last year. The consumption growth is largely a consequence of rising wages, deflation and low energy prices, which leads to an increase in disposable income of citizens.
Macroeconomists also pointed out that excellent results were achieved in tourism in the first quarter, mainly thanks to early Easter holidays. “In the first three months, the number of overnight stays of tourists increased by 18.9 percent and reached to 1.67 million, which will certainly have a positive impact on the balance of payments and the export of services as components of GDP”, said one of the economists.
The strengthening of industrial production will also have a positive impact on GDP, since it has been growing steadily for 14 consecutive months, which is the longest uninterrupted growth since 2007. In the first quarter, industrial production increased by 6.8 percent compared to the same quarter last year.
Thanks to good indicators in the first quarter, many macroeconomists have increased their estimates of economic growth for the entire 2016. According to the survey, the eight macroeconomists expect GDP growth of 1.4 percent this year, while three months ago they expected growth of 1.2 percent.
The European Bank for Reconstruction and Development (EBRD) recently increased its estimate of GDP growth this year from 0.5 to 1.5 percent. Similar growth is expected by the Zagreb Institute of Economics as well. The International Monetary Fund (IMF) estimates that growth will reach about 1.9 percent. The European Commission and the Croatian National Bank expect GDP growth of 1.8 percent, which is close to the government’s estimate of 2.0 percent.
