GDP Higher Than Expected: Economy Grew 2.8 Percent in the Second Quarter

The Croatian economy grew by 2.8 percent in the second quarter of this year compared to the same period last year, which is a slightly faster growth than in the previous quarter and higher than expected. The technical Minister of Finance, Zdravko Marić, assessed that such growth and the tourist season raise the Government’s economic growth projection to a level of 2.5 percent.

The State Bureau of Statistics (DZS) published its first estimate on Wednesday, indicating that the gross domestic product (GDP) in the past quarter increased by 2.8 percent compared to the same period last year.

This is a better figure than expected. Eight macroeconomists who participated in a Hina survey estimated on average that the economy grew by 2.3 percent year-on-year, with their growth estimates ranging from 2.1 to 2.5 percent.

This marks the seventh consecutive quarter of GDP growth, and it is faster than in the previous quarter when the economy strengthened by 2.7 percent.

Technical Minister of Finance Zdravko Marić stated that the GDP growth aligns with analysts’ expectations and that the Government’s expectations for the second quarter have been partially met.

“With stable and slightly slowed export growth, personal consumption has yielded very good results in the second quarter, and what is very encouraging is investment,” said Marić. He noted that investments are growing by over six percent in the second quarter.

The DZS reported that the largest contribution to the increase was achieved through the growth of exports of goods and services, which rose by 4.1 percent during this period.

The contribution of domestic demand was positive. Among the components of domestic demand, the strongest positive impact on economic activity was caused by the increase in household final consumption expenditures – 3 percent.

The contribution of net foreign demand was negative. Other key components of GDP also increased, with government consumption rising by 2.6 percent, while gross fixed capital investment jumped by 6.3 percent.

According to seasonally adjusted data, GDP strengthened by 0.6 percent in the first quarter compared to the previous quarter, while it increased by 2.0 percent compared to the first quarter of last year.

When asked about the projection for the end of the year, Marić responded that the growth in the second quarter and the tourist season, which is in full swing, raise the Government’s projection to a level of 2.5 percent.

“You know that we started with the original growth assumption of two percent. Many disputed and criticized this, but we said it was a realistic assumption, and it is now evident that the economy this year definitely has better performance than that,” he concluded in a statement to reporters.