On Friday, the Croatian Bureau of Statistics published its first estimate on GDP for 2019 showing that in real terms it increased by 2.9% YoY. In Q4 Croatian economy expanded by 2.7% YoY, approximately in line with Q3 when GDP increased by 2.8% YoY.

Final consumption continues to be the main contributor to GDP which accelerated pace and increased by 3.8% YoY, 80bps higher looking at Q3 growth. The largest part of final consumption, household expenditure increased by a strong 4.0% YoY, while general government’s expenditure amounting to 1/4 of final consumption accelerated and increased by 3.5%. 

Gross fixed capital formation rose by 4.0% YoY, reflecting minor slowdown compared to the previous quarters of the year when investment expanded by 5% while in the first two quarters of the year growth was higher at 11.5% and 8.2%, respectively. Average growth of investments for the years still stands above 7.0% so it will add about 1% point growth to overall GDP.

The trend in exports and imports continued from the last quarter where exports growth accelerated and imports growth decreased. Namely, exports of goods and services increased by 5.6% YoY due to skyrocketing exports of services (1.1% YoY). On the other hand, imports of goods and services increased by only 1.1% with imports of goods being at 0.9% YoY compared to growth of 4.6% and 9.7% in Q1 and Q2. Deceleration of imports of goods and services growth to 0.1% YoY was a surprise in magnitude. It was driven by deceleration in increase of import of goods to 0.8%, and less services were imported than in same quarter of 2018.

Croatian GDP, Real Growth Rates (%, YoY)*

*Quarterly Gross Domestic Product, seasonally adjusted real growth rates