The State Bureau of Statistics will publish today a report on industrial production for October, which, according to macroeconomists’ estimates, will show that activity has fallen again, but somewhat less sharply than a month earlier.
Five macroeconomists who participated in the Hina survey estimate that, on average, industrial production in October slipped by 6 percent compared to the same month last year. All expect a decline, ranging from 5 to 7 percent.
Although sharp, this would be a milder decline than in September, when industrial production plummeted by 7.7 percent.
The decline in industrial activity is primarily due to weak domestic and foreign demand.
“The continuation of weak domestic demand, along with a decline in foreign demand, low competitiveness, and the restructuring of manufacturing companies continue to cause a steep decline in industrial production on an annual basis,” notes one of the macroeconomists in the Hina survey.
The weakness of domestic demand is indicated by a decline in retail trade for seven consecutive months. During the summer, at the peak of the tourist season, the drop in consumption somewhat slowed, but already in September, retail trade plummeted sharply by 6 percent.
At the same time, foreign demand is also weakening as the eurozone economy has plunged into recession. As a result, the demand from those countries for imported products has weakened, leading to a decline in Croatian exports in recent months. Croatian commodity exports, expressed in euros, were 2.2 percent lower in the first nine months compared to the same period last year.
