GDP: Croatian economy grew by 0.4 percent in the first quarter, the slowest in six years

The Croatian economy grew by 0.4 percent in the first quarter compared to the same period last year, the slowest growth in the last six years, a consequence of the negative impact of the coronavirus crisis.  

The Croatian Bureau of Statistics (DZS) published on Friday the first estimate indicating that the gross domestic product (GDP) increased by 0.4 percent year-on-year in the last quarter, marking the 23rd consecutive quarter of GDP growth, but significantly slower than in the previous quarter, when growth was 2.5 percent.

This is also the slowest growth since the last quarter of 2014, when the economy grew by 0.7 percent year-on-year.

Slowed consumption growth, exports and imports fell

The slowdown in GDP growth is a result of the deceleration in household consumption growth and the decline in the export of goods and services, according to the DZS report.

The coronavirus pandemic and restrictive measures aimed at curbing the virus began to negatively affect economic activity in the second half of March, leading to a decline in consumption. Retail trade turnover in March fell by 7 percent year-on-year, the largest drop since 2010.

Industrial production, on the other hand, fell by almost five percent in the same month, marking the fifth consecutive month of decline, while exports and imports fell due to the initial lockdowns of economic activities and traffic, for example in Italy, to curb the spread of the coronavirus.

According to data published today by the DZS, household consumption increased by 0.7 percent in the last quarter compared to the same period a year earlier, which is slower growth compared to the previous quarter, when it rose by 4 percent.

Exports of goods and services fell by 3 percent year-on-year in the last quarter, while in the previous quarter they increased by 5.6 percent.  Specifically, exports of goods increased by 0.3 percent, while exports of services fell by 9.4 percent.  Imports of goods and services simultaneously decreased by 5.8 percent year-on-year, while in the previous quarter they increased by 0.1 percent.  Imports of goods decreased by 1.6 percent, while imports of services fell by 25.1 percent.

In the last quarter, gross investments in fixed capital increased by 3.1 percent year-on-year, which is slower compared to the growth of 4 percent in the previous quarter.

In the last quarter, government consumption also increased by 4.8 percent year-on-year, which is a faster growth compared to the previous quarter, when it was 3.5 percent.

Data better than the EU average

According to seasonally adjusted data, GDP fell by 1.2 percent in the first quarter compared to the previous quarter, while it increased by 0.3 percent year-on-year.  These are better figures compared to the European Union average. According to Eurostat data, in the first quarter, the EU economy fell by 3.3 percent compared to the previous quarter, while compared to the first quarter of last year, the decline was 2.6 percent.  

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