May the 11th, 2023 – Croatian exports have increased by almost 14 percent, but less trade has been being done with the United States, China, and even with neighbouring Hungary.
As Poslovni Dnevnik/Marija Brnic writes, for the first time in two years, state statisticians have been recording faster growth in Croatian exports than imports. In the first three months of 2023, Croatian exports increased at a rate of 13.7 percent, more than double the growth of imports, which were higher by 6.1 percent.
In absolute terms, the value of Croatian exports reached 5.82 billion euros in the first quarter of this year, while imports exceeded 9.78 billion euros. As such, there is still a large deficit in trade.
Considering that this is only preliminary data, there are no official figures yet that would indicate what contributed the most to the stronger growth of Croatian exports back in March, which improved the picture at the level of the first quarter of 2023. However, from the preliminary data we currently have for imports, it is evident that the procurement of goods from third countries, meaning from countries which aren’t EU menber states, has slowed down. In the past year, this segment of foreign trade recorded the strongest growth, mostly thanks to the import of LNG from the USA, and the rise in oil and gas prices.
In the first quarter of this year, the value of imported goods from markets outside the European Union practically remained at the same level as it was a year ago, more precisely at 2.3 billion euros.
21 percent less trade with neighbouring Hungary
Indications of the movement of goods exchange can be obtained to some extent from the data processed by the CBS for the first two months of 2023. It is true that Croatian exports actually slowed down during that period and the rate of its growth after a long time, practically three years, wasn’t in the double-digits.
Goods worth a total of 3.45 billion euros were exported, which is 9.2 percent more than a year earlier, while imports were at the same time higher by 12.4 percent, or 6.14 billion euros in value. The drop in energy prices left the biggest mark of all, which is very much evident from the trade data we currently have with Hungary.
Last year, Hungary was the fastest growing foreign trade partner Croatia could boast of, rising to the third place among this country’s main export markets, after Italy and Slovenia, overtaking Germany. The beginning of this year, on the other hand, was very much marked by a decline in the value of trade with Hungary, a significant 21 percent in terms of exports, while imports were weaker by 0.8 percent.
Germany is once again on the throne of buyers of Croatian products, and trade with Slovenia is also strengthening, in both directions. While Italy currently remains in the middle, the beginning of the year has been marked by an extremely strong jump in already high levels of imports, by as much as 37 percent, and out of 6 billion euros in total imported goods, 922 million of those euros arrived from Italy.
Changes and the weakening of imports, on the other hand, have been the most noticeable in terms of Croatia’s relationship with the USA and Mozambique, as well as with China. Crucial in the case of the first two countries is LNG, the import of which for the Krk terminal well and truly exploded last year. This year, significantly weaker figures were recorded in Croatia’s exchange with the USA, as imports fell by 39 percent, to slightly less than 250 million euros.
On the other hand, back in January this year, Mozambique entered the list of international markets with which Croatia is monitoring trade for the very first time, precisely thanks to LNG. In the first two months of 2023, the value of its imports reached as much as 145 million euros. Imports from China, on the other hand, fell by 9.3 percent, to 200.5 million euros. Compared to these figures, Croatian exports to China are rather symbolic (10 million euros) and also have a negative trend attached to them.
At the beginning of the year, a little more work was done across the pond in the USA (exported goods totalled 92 million euros), but also in Russia, where over 32 million euros worth of goods, which weren’t covered by sanctions, were placed. Imports from Russia, on the other hand, were of course minimised, falling by 39 percent (to less than 14 million euros).
On the export list, there is still strong recorded growth in Croatian exports to neighbouring CEFTA countries, Bosnia and Herzegovina, and Serbia, with which for a short time last year a trade deficit was recorded for the first time, but this year, Croatian exports with growth of 36 percent once again exceed imports. Goods worth 218 million euros were exported, and 183 million were imported.
If you look at the data in terms of activities, the food industry, which sold 286 million euros of goods (25 percent more), as well as the clothing industry, electrical equipment, machines and devices stand out the most in terms of exports. Wood processors and metal production have had a far weaker start, while mining has recorded the biggest decline. The value of Croatian exports fell by almost a third compared to the first two months of 2022 (124 million euros), but at the same time imports were three times higher, growing at a rate of 41 percent and exceeding half a billion euros.
In their review, analysts from the Croatian Chamber of Commerce (HGK) pointed to a trend of calming the growth of producer prices on the international market. In the first quarter of 2023, they were at their lowest levels since the middle of 2021, meaning that now they have less influence on the nominal inflation of the value of Croatian exports.
They estimated that after the deflation of the total value of producer prices on the foreign market, the value of Croatian exports in the first quarter of 2023 grew by 7.4 percent in real terms. In March, if you look at their earlier estimates, Croatia recorded considerably strong export growth, because in the analysis of the data for January and February, they determined that the value of exports grew in real terms by only 2.3 percent.
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