Croatia Had a Positive Balance in Q2 – Surplus on the Current Account of the Balance of Payments of Three Million Euros

According to preliminary data from the Croatian National Bank (HNB), the surplus on the current account of the balance of payments in the second quarter of this year amounted to 3 million euros, marking the first time Croatia has had a positive balance in the second quarter, and analysts from Raiffeisenbank Austria (RBA) expect a surplus for the entire year for the third consecutive year.

As the current account deficit in the second quarter of last year was 371.8 million euros, the surplus of 3 million euros in the second quarter of this year represents an improvement of 375 million euros.

Analysts from Raiffeisenbank Austria (RBA) emphasize that the largest positive contribution to the significant improvement in the second quarter came from the reduction of the deficit in the goods account. The deficit in the goods account in the second quarter of this year amounted to 1.75 billion euros, which is 120 million euros or 6.4 percent lower compared to the same quarter last year. Meanwhile, revenues from goods sales, which amounted to 2.73 billion euros in the second quarter, increased by 341 million euros or at a rate of 14.2 percent year-on-year, while expenditures, i.e., outflows based on goods imports, recorded an increase of 221 million euros or 5.2 percent, to 4.49 billion euros.

– In line with expectations, excellent indicators from the tourist pre-season during the second quarter consequently resulted in improvements in the services account, which recorded a surplus of nearly 1.9 billion euros. Compared to the second quarter of last year, the surplus in the services account increased by 110 million euros or 6.2 percent year-on-year, RBA analysts point out.

In the second quarter of this year, travel revenues – tourism amounted to 1.94 billion euros, which is an increase of 6.4 percent or 116.6 million euros compared to the same period last year, according to HNB data. A significant positive contribution also came from the secondary income account. In the second quarter, the surplus of 306.3 million euros was higher by 118 million euros or 62.6 percent compared to the same period last year. This, RBA analysts note, is a result of a noticeable increase in revenues, by 23.9 percent, to 549.7 million euros, alongside a simultaneous decrease in expenditures, by 4.6 percent, to 243.5 million euros.

A positive contribution to the achieved surplus on the current account also came from the primary income account, whose deficit was reduced by 26.8 million euros compared to the same period last year or by 6 percent, primarily due to increased revenues in the employee compensation account. The deficit in the primary income account in the second quarter of this year amounted to 420.9 million euros. Preliminary data from HNB shows that in the first half of this year, the current account deficit of the balance of payments amounted to 1.28 billion euros, which is 582.9 million euros or 31.3 percent lower than the deficit in the first six months of last year.

– Given the achieved surplus on the current account during the second quarter of this year and the expected usual surplus in the third quarter, which will be strongly supported by excellent results in the main tourist season, as well as growing foreign demand, we expect a surplus on the current balance of payments for the third consecutive year at the level of the entire 2015, RBA analysts emphasize.