Consumption in August Increased for the 36th Consecutive Month, by 6.4 Percent

In Croatia, consumption in August increased by 6.4 percent compared to the same month last year, marking the 36th consecutive month of growth, and it was faster than the previous month and more than expected.

The Croatian Bureau of Statistics (DZS) published on Friday the first estimate of retail trade turnover, and according to seasonally adjusted data, retail sales in August nominally increased by 8.5 percent and real growth was 6.4 percent compared to the same month last year.

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This is a faster growth than a month earlier, when consumption increased by 5.9 percent year-on-year.

This is also a faster growth than expected. Three macroeconomists who participated in a Hina survey expected an average consumption growth of 5.6 percent. Their growth estimates ranged from 5.2 to 6 percent.

In August, the positive trend continued, as consumption has been growing for 36 consecutive months, which has not been recorded since DZS has been tracking these data.

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In addition to the accelerated growth of consumption, “the data for August confirmed the continuity of positive growth rates that have been ongoing since September 2014,” analysts from Raiffeisenbank Austria (RBA) noted in their commentary on the DZS report.

According to DZS data, retail turnover in the first eight months of this year increased by 5.3 percent in real terms compared to the same period last year.

RBA analysts say that favorable trends in retail in August were also indicated by previously published data from the Croatian National Bank (HNB) regarding the continued improvement of consumer optimism.

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“These trends are primarily driven by yet another exceptionally successful tourist season, which should yield a series of positive effects on personal consumption, household income, and the economy as a whole, as well as favorable developments in the labor market and the income relief brought by the tax reform,” RBA analysts believe.

They also state that suppliers and market chains have shown a high degree of flexibility and have quickly adapted to the new conditions related to the crisis in Agrokor. Therefore, they expect solid retail turnover growth to continue year-on-year in September.