Yesterday, the Croatian Bureau of Statistics published its first estimates on GDP for Q3 2019 showing that Croatian economy expanded by 2.9% YoY, accelerating from Q2 when GDP increased by 2.4% YoY.

Final consumption continues to be the main contributor to GDP which kept its pace and increased by 3.1% YoY, 10bps higher looking at Q2 growth. The largest part of final consumption, household expenditure increased by a robust 3.3% YoY, while general government’s expenditure decelerated and increased by 2.9%. 

Gross fixed capital formation rose by 5.0% YoY, reflecting significant slowdown compared to the first two quarters of the year when investment expanded by 11.5% and 8.2%, respectively. However, looking at the first three quarters, growth of investments still stands above 6.0% that will add about 1% point growth to overall GDP.

The main surprise came from both exports and imports. Namely, exports of goods and services accelerated and increased by 4.7% YoY due to skyrocketing exports of goods (7.1% 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 1.1% YoY is a positive sign and shows that domestic industry was producing more for increased spending during high summer season.

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

*Quarterly Gross Domestic Product, seasonally adjusted real growth rates