Expectations in the Croatian Economy Significantly Deteriorated in April

Expectations in the Croatian economy significantly deteriorated in April, reflecting poorer assessments of industrial production and demand for services, a monthly survey by the European Commission revealed on Monday.

The Economic Sentiment Index (ESI) in Croatia fell by 4.9 points in April compared to the revised value in March, sliding to 107.7 points.

Managers in the industry showed significantly milder optimism in April, with worsened production expectations in the coming months and poorer assessments of results in the previous period, along with planned weaker employment. The expectations index in the sector fell by almost eight points compared to March.

Sentiment in the services and retail sectors also worsened, as indicated by a decline in the index by 7.3 and almost six points, respectively. Business performance in the past three months was worse than indicated by assessments in the previous month, and the forecast for demand for services has significantly deteriorated.

Only the sentiment in the construction sector slightly improved, according to an increase in the index by 2.3 points.

Among consumers, sentiment remained stable compared to March, as reflected in the almost unchanged value of the index, the survey shows.

Managers in the economy as a whole expect to hire less in the coming months, according to a decline in the Employment Expectations Index (EEI) by three points. However, business uncertainty has eased compared to March, they estimate, and the Uncertainty Index (EUI) fell by almost one point.

Slight Deterioration in the Eurozone

The atmosphere among managers and consumers in the Eurozone as a whole marginally deteriorated in April, as evidenced by a decline in the Economic Sentiment Index (ESI) by 0.6 points compared to the revised value in March, to 95.6 points.

The marginal decline in the index reflects a weaker atmosphere among business leaders in the industry, indicated by a drop in the index by 1.6 points.

Expectations also worsened in retail compared to March, as shown by a decline in the index by 0.8 points. Following are the services and construction sectors, where the atmosphere slightly deteriorated, reflected in a decline in the index by 0.4 points.

Consumer sentiment, however, was almost unchanged compared to March.

Business leaders in the 20-member economy expect weaker employment in the coming months, according to a decline in the EEI by 0.7 points. Business uncertainty is expected to be slightly milder compared to estimates in March, which was reflected in a decline in the EUI by half a point.

Among the leading economies in the Eurozone, sentiment deteriorated the most in the French economy, according to a drop in the ESI by almost five points. Italy follows with a decline in the index by 1.3 points.

In the group of ‘large’ economies, sentiment improved the most in Spain and Germany, according to an increase in the index by 2.3 and 1.5 points, respectively.

The largest economy outside the Eurozone, Poland, also records an improved atmosphere, according to an increase in the index by 1.5 points.