In Croatia, retail consumption increased by 1.2 percent year-on-year in February, marking the 42nd consecutive month of growth, but at a significantly slower pace than the previous month.
The Croatian Bureau of Statistics (DZS) published a report on retail trade on Friday, and according to seasonally adjusted data, consumption fell by 2.2 percent compared to the previous month, while it increased by 1.2 percent compared to February of last year.
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This is a significantly slower growth rate than a month earlier, when consumption rose by 6.1 percent year-on-year, the fastest since August of last year.
Although slowed, the growth in February represents a continuation of a record positive trend, given that the last year-on-year decline in consumption was recorded in August 2014.
The growth in consumption for 42 consecutive months has not been recorded since DZS began tracking these data.
Growth in Retail Activities
In February, the turnover from retail trade in food, beverages, and tobacco products increased by 0.1 percent year-on-year, while non-food retail strengthened by 3.6 percent.
– The slowdown in the annual growth rate in February is a result of milder growth rates in most retail activities, analysts from Raiffeisenbank Austria (RBA) noted in their commentary on the DZS report.
They also added that the largest growth in retail trade turnover, when observing by trade sectors, was recorded in February in the category of motor vehicles, with an increase of 9.8 percent year-on-year.
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– This trend was expected, given the changes in tax regulations, specifically tax relief, which came into effect at the beginning of this year. This was also indicated by the growth in new car sales in February at a double-digit annual growth rate of as much as 46.4 percent, RBA analysts noted.
The government, in January, adopted a Regulation on the method of calculation and amounts of components for calculating the special tax on motor vehicles, according to which new vehicles with a sales price including VAT lower than 150,000 kuna are completely exempt from taxation based on value criteria, which represents two-thirds of all new vehicles sold.
Continuation of the Record Series Expected
RBA analysts believe that the growing optimism, confidence, and trust of consumers indicate a continuation of favorable trends in retail.
– Given the expected continuation of favorable economic trends, primarily supported by personal consumption and the export of goods and services, retail trade should continue with solid growth rates, conclude RBA analysts, who expect retail growth of around 3 percent for the entire year.
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In the first two months of this year, retail trade turnover increased by 3.6 percent compared to the same period last year.
Thus, the growth in consumption has entered its fifth year. In the entire previous year, retail turnover increased by 4.7 percent, faster than the previous year.
The growth in retail at the beginning of the year indicates a continuation of economic growth, given that personal consumption is the largest component of gross domestic product (GDP).
