Personal Consumption Growth Slows Down in December

Total Croatia News

ZAGREB, January 30, 2018 – Retail sales in Croatia in December 2017 grew 1.4% on the year, and December was the 40th consecutive month to see consumption grow, albeit at a slower rate than in the previous month and than expected.

The national statistical office (DZS) on Tuesday published its preliminary estimate of retail trade turnover, and according to working-day adjusted data, retail sales in December grew by 3.2% in nominal terms and by 1.4% in real terms compared to the same month of 2016. The growth is slower than in November, when consumption grew 5.7% on the year.

Four analysts polled by Hina had expected consumption in December to grow by 4.6% on average on the year, their estimates ranging from 4.2% to 5.1%.

Even though consumption growth has slowed down, the record-setting trend of positive movements has continued since August 2014 when consumption dropped for the last time. A 40-month streak of rising consumption has not been recorded since the DZS started keeping record of consumption indicators.

Raiffeisenbank Austria (RBA) analysts said the slowing down of consumption growth was partly due to the fact that in December 2016 retail sales were 5.8% up in real terms on the year, as well as due to consumers delaying car purchases following tax breaks that took effect at the start of the year. RBA analysts noted that in December the sale of new cars dropped by 38% compared to the same period of the year before.

According to DZS figures, retail sales in 2017 grew 4.7% in relation to the year before. 2017 was thus the fourth year in a row to see an increase in consumption, with consumption growing at a faster rate than in 2016, when retail sales grew 4%.

RBA analysts said that the growing consumer optimism and confidence indicated the continuation of favourable trends in retail sales.


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