Exports Unexpectedly Increased by 18 Percent in July Compared to the Same Month Last Year

Although the business sentiment tests conducted in the second quarter of this year showed exceptionally low export expectations among managers in the Croatian industry for the next three months, indeed the lowest since 2020, the value of Croatian exports in July surprisingly jumped high, both compared to June of this year (16 percent) and compared to July of last year (18 percent).

According to preliminary estimates from the Croatian Bureau of Statistics, the value of exports in July amounted to 2.17 billion euros, which is the highest monthly value this year. That July’s exports could be significantly better than previously expected was hinted at recently when the CBS announced that industrial production in July was eight percent higher than the previous month. As the slowdown in industrial production since the last quarter of 2022 coincided with the slowdown in exports, it was logical to predict that such strong month-on-month growth, especially in the middle of summer, could only mean one thing – an increase in export orders.

And since all realized production in July was not immediately delivered and invoiced to customers, it is assumed that export results for August could also be better than expected. After the value of exports in July contributed to the return of exports to a growth phase on an annual basis, the prospects that the value of this year’s merchandise exports will be three to four percent higher than last year by the end of the year have also increased.

This is supported by the calculation of HGK’s macroanalysts that the real value of exports in the first seven months of this year, taking into account producer prices in foreign markets, increased by 3.5 percent, compared to a nominal growth of 2.4 percent. From detailed data on this year’s exports, which relate to the first six months where the value of exports was at the same level as in the first half of last year, we see that during that period the value of electricity and gas exports was 228 million euros lower than at that time last year.

The nearly halved value of exports of these energy sources was fully compensated primarily by the growth in exports of refined petroleum products, whose value increased by 35 percent, or 173 million euros, and chemicals and chemical products, whose value amounted to 669 million euros, representing a growth of 15 percent. The value of exports of agricultural and industrial food products in the first half of the year was slightly down (1.2 percent), but this is a concerning trend as imports of these products increased by 8.1 percent.