Yesterday, the Croatian Bureau of Statistics released the latest flash estimate for the Croatian GDP growth in Q3 2023. In the report, we can see that the Croatian GDP grew by 2.8% YoY in Q3 and amounted to EUR 22.1bn. Meanwhile, the seasonally adjusted quarterly GDP in real terms increased by 0.3% QoQ, and 3% YoY.
The Croatian Bureau of Statistics has released the first flash estimate for the Croatian GDP growth in Q3 2023. According to the estimate, the Croatian GDP grew by 2.8% YoY and amounted to EUR 22.1bn. At the same time, the seasonally adjusted quarterly GDP in real terms grew by 0.3% QoQ, and 3% YoY. Furthermore, according to the European Commission’s latest estimates, Croatia’s GDP should grow at 2.4% YoY in 2023, meaning that Q4 growth should amount to 2.5% YoY if that level is to be reached.
Croatian GDP* (2007 – Q4 2023**, %, YoY)
Source: Croatian Bureau of Statistics, InterCapital Research
*Quarterly Gross Domestic Product, seasonally adjusted real growth rates
**Q4 2023 and 2023 are based on estimates
In terms of the categories of GDP, final consumption expenditure grew by 2.7% YoY. Of this, households recorded growth of 3% YoY and amounted to EUR 8.6bn, General government grew by 2.1%, and amounted to EUR 2.9bn, while Non-Profit Institutions Serving Households (NPISH) recorded a more noteworthy decline of 6.1% YoY, and amounted to EUR 188m. The growth from households is to be expected, both due to higher spending, but also due to the tourists which also contributed to consumption growth. Meanwhile, Gross fixed capital formation grew by 6.1% YoY and amounted to EUR 2.7bn, supported by various EU funds, including the Recovery and Resilience Facility (RRF) and REPowerEU. In fact, Croatia is one of the largest receivers of funds in the EU, which certainly is supportive of further investment development.
In terms of exports and imports, exports amounted to EUR 12.4bn, decreasing by 8.5% YoY, whereas exports of goods declined by 20.4%, and amounted to EUR 4bn, while exports of services recorded a slight 0.5% decline, and amounted to EUR 8.3bn. On the other hand, import of goods and services declined by 12.1% YoY and amounted to EUR 8.5bn. Of this, imports of goods declined by 14.8% and amounted to EUR 7bn, while imports of services increased by 5.9%, and amounted to EUR 1.5bn. For both exports and imports of goods, a decline is expected. The EU member countries are the largest trading partners for Croatia, and as most of them are under pressure from the current macroeconomic situation, a decline in trade is expected.
Meanwhile, taking a look at the first 3 quarters of 2023, total GDP amounted to EUR 44.6bn, an increase of 2.4% YoY, while on a trailing 12-month basis, it amounted to EUR 58.8bn, an increase of 2.6% YoY. Overall, Q3 was supported by growth in household spending, which despite inflationary pressures remained high. Furthermore, for Croatia, the largest export service is for sure tourism. In 2023, Croatian tourism finally managed to reach the level of 2019 in terms of tourist arrivals and overnight stays. Meanwhile, revenue growth was on average, over 30% compared to 2019. As such, the slight decrease in service exports invariably came from other categories inside the export services, which was offset by the aforementioned tourism growth.
Lastly, as compared to what the Eurostat forecasted 2 weeks ago, Croatia’s GDP growth in Q3 was expected at 2.3% YoY, meaning that the country was able to outperform on this metric. Furthermore, due to the economic situation, Croatia’s growth in Q3 could end up being one of the highest in the EU, which is certainly a positive development.
