According to the first estimate, in real terms, the Croatian GDP grew by 2.8% YoY and amounted to EUR 16.7bn. Meanwhile, seasonally adjusted quarterly GDP in real terms increased by 2.6% YoY and 1.4% QoQ in Q1 2023.

Looking at the first estimates for the Croatian GDP, released on Monday by the Croatian Bureau of Statistics (DZS), the Croatian GDP grew by 2.8% YoY in real terms during Q1 2023. In terms of the seasonally adjusted quarterly data, in real terms, the GDP increased by 2.6% YoY, and 1.4% QoQ. This means that in Q1 2023, it amounted to EUR 16.7bn.

Breaking the components of the GDP a bit further, on a YoY basis, in Q1 2023 final consumption expenditure increased by 1.5%, and amounted to EUR 10.8bn. Inside this category, Households recorded growth of 1.4%, while the General government increased by 2.2% amounting to 2.8bn. Gross fixed capital formation increased by 3.9% YoY, amounting to EUR 2.9bn, while Exports of goods and services grew by 4.8% YoY, amounting to EUR 5.6bn. Imports of goods and services slightly declined by 0.8%, amounting to EUR 8.1bn, implying that exports have continued to grow while imports are declining.

Households still contribute the majority of the Croatian GDP, comprising 61% of the total GDP. In our previous quarterly estimates, we were concerned about the potential of a “real income squeeze” for households, however, the estimate numbers have given us relief that it might not be as harsh. Investments have demonstrated solid growth at 3.9% YoY, and we believe they can still reach our previous projection of 5.5% for FY 2023.

In this estimate, we can see the Croatian GDP is still showing promising growth. Even with the uncertain macroeconomic outlook, exports of services have shown phenomenal growth with a 9.1% YoY increase, outpacing the growth of all other constituents. Financial/insurance and professional activities have recorded respective 8.7% and 7.9% YoY increases. Construction and real estate activities have followed with 4.6% and 4.8% growth rates, respectively. The GDP estimates have shown us some very encouraging data, as the growth rate has outpaced our previous projections for the quarter and should quell any fears of entering a technical recession, at least in the short term.

Croatian GDP growth (YoY, %)*

Source: Croatian Bureau of Statistics, InterCapital Research

*Quarterly Gross Domestic Product, seasonally adjusted real growth rate