CEIZ Index: GDP Growth Slightly Slows in Q3

The value of the CEIZ index in the third quarter is slightly lower compared to the previous quarter, indicating a slowdown in business activity, reported the Economic Institute Zagreb (EIZ) on Friday, along with an estimate that the real GDP growth rate in the third quarter of 2016 compared to the same period last year could be 2.2 percent, which is a slight slowdown in growth compared to the first half of the year.

“Since March of this year, the CEIZ index has recorded high positive rates that are slightly decreasing month by month. In the first month of the third quarter, July, the CEIZ index recorded a value of two index points, which is a decrease of 0.7 index points compared to the previous month and a decrease of 1.1 percentage points compared to the same period last year. Therefore, the index value in the third quarter is somewhat lower compared to the previous quarter, indicating a slowdown in business activity in the third quarter,” stated EIZ.

However, they add, measured on an annual basis, the average value of the CEIZ indicates an acceleration of economic activity.

Therefore, based on the movements of the CEIZ index, EIZ expects that the real GDP growth rate in the third quarter of 2016 compared to the same period last year could be 2.2 percent, which is a slight slowdown in growth compared to the first half of the year. In the first quarter, the annual growth of real GDP was 2.7 percent, and in the second quarter, it was 2.8 percent.

The CEIZ index is a monthly composite indicator of the business cycle developed at the Economic Institute Zagreb, and its purpose is to provide timely information about the current state of the business cycle, which is why the value of the CEIZ index changes simultaneously with changes in the business cycle.

The CEIZ is a single-number indicator of the business cycle that contains information that would otherwise need to be collected by analyzing a large number of different economic series. Unlike the time series of quarterly GDP, it provides a monthly assessment of the state of the economy, thereby providing more precise information about changes occurring over shorter periods. It is available one to three months before the release of quarterly GDP data, allowing economic policymakers and the interested public to timely monitor economic trends, EIZ notes.