In September, retail trade in Croatia fell by 6 percent year-on-year, which is nearly double the decline that was expected and significantly greater than in August.
The Croatian Bureau of Statistics today published its first estimate indicating that the turnover from retail trade, achieved by all business entities engaged in this activity regardless of their primary activity, nominally fell by 1.4 percent and real terms by 6 percent compared to the same month last year.
This is a significantly greater decline than was estimated. Five macroeconomists who participated in a Hina survey expected an average consumption decline of 3.3 percent year-on-year for September. Their estimates ranged from 1.1 to 4.5 percent.
This marks the seventh consecutive month of declining consumption. Thanks to a good tourist season, the decline slowed during the summer months, but accelerated again in September – from 3.2 percent in August to 6 percent. This is the largest decline in retail trade since April, when it dropped by 7 percent.
– Unfavorable fundamentals continue to be present in the form of a decline in real disposable income, as evidenced by the data showing a decrease in average net wages of approximately three percent year-on-year. Additionally, unemployment and general pessimism are rising again, says Hrvoje Stojić, head of the Economic Research Department at Hypo Alpe Adria Bank.
He also points out that the prices of utility services, electricity, and gas have increased, which is causing a decline in real disposable income, and this will be felt even more in the winter months.
– There is also a trend of deleveraging among the population, as evidenced by the fact that in the third quarter, net deposits of the population increased by as much as 4.3 billion kuna, says Stojić.
After this consumption data, all relevant indicators for the third quarter are known. Given the further decline in consumption, industrial production, and other key indicators, it is estimated that gross domestic product also fell in the third quarter.
However, thanks to a good tourist season, the decline is expected to be smaller than in the second quarter, when GDP weakened by 2.2 percent year-on-year.
– After all this data, we estimate that GDP fell by about 1.5 percent in the third quarter, concludes Hrvoje Stojić. The Croatian Bureau of Statistics will publish a more detailed report on retail trade in two weeks.
