Industrial Production Collapses, Retail Sales Up

Total Croatia News

ZAGREB, July 30, 2019 – Croatia’s industrial production fell by more than 5% in June 2019 compared with the same month of 2018, its largest decrease since December 2018 and the first after five months of growth, data released by the National Bureau of Statistics (DZS) on Tuesday shows.

According to calendar-adjusted data, industrial production in June 2019 fell by 2.2% from the previous month and sank by 5.6% compared with June 2018. It was the first drop in production after five months of growth and the largest decline since December 2018 when it plummeted by 6.6% year on year.

In June 2019, compared with June 2018, the production of capital goods shrank by as much as 19.1%, the production of non-durable consumer goods declined by 3.8%, the production of intermediate goods fell by 3.7% and that of energy by 1.8%. Only the production of durable consumer goods observed an increase, of 7.8%.

In the first half of 2019, compared with the same period of 2018, industrial production rose by 0.9%. Last year, production contracted by 1%, its first decrease after four years of growth.

Analysts at Raiffeisenbank Austria (RBA) expect that the volume of industrial production will record “a modest, yet positive growth rate” in 2019.

“Industrial production may be supported by solid domestic demand, but a slowdown in Croatia’s main foreign trade partners and the still low competitiveness may put a weight on the recovery of industry,” RBA said.

Retail sales in Croatia in June 2019 increased by 6.3% on the month and by 6.1% on the year, their highest year-on-year increase since February when they jumped by 8.7%, according to figures released by the National Bureau of Statistics (DZS) on Tuesday.

Retail sales thus returned to positive territory after decreasing by 2% in May year on year, which was their first drop after rising for 56 straight months.

Compared with June 2018, retail sales of food, beverages and tobacco products increased by 5.4%, while sales of non-food products jumped by 8.6%.

In the first half of 2019, compared with the same period of 2018, retail sales rose by 4.4%.

“Looking at the second quarter of this year alone, when retail trade increased by 3% year on year, a slight slowdown can be observed. However, it is quite certain that retail trade reflects and confirms that personal consumption will make the greatest contribution to GDP growth. As a result of positive trends on the labour market, growing credit activity and positive expectations, which will also be encouraged by planned tax reliefs, retail trade is expected to grow in the months ahead, albeit at somewhat more modest rates,” analysts at Raiffeisenbank Austria (RBA) said in their comment on the DZS report.

More economic news can be found in the Business section.


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