On Friday, the Croatian Bureau of Statistics published its first estimate for the GDP in 2021, showing that in real terms, it increased by 10.4% YoY. At the same time, in Q4 2021, the GDP increased by 9.7%.
According to the 1st estimates of the Croatian Bureau of Statistics, GDP in real terms increased by 10.4% YoY. When looking at Q4 2021 data, seasonally adjusted data showed a slight decrease of -0.1% QoQ. Compared to Q4 2020, seasonally adjusted growth was 9.9% QoQ. This would also mean that in Q4 2021, Croatian GDP surpassed the decline experienced in 2020 due to the COVID-19 pandemic.
Final consumption, the main contributor to GDP, increased by 9.3% in Q4 2021, as the economic recovery experienced during the year continued, on the back of relatively relaxed pandemic measures (as compared to the EU). It should also be noted that Croatian fundamentals look even better compared to before the pandemic, due to the increasing wages, strong saving rates, strong tourist season (over 70% of 2019 levels in Q3), and strong inflow of investments largely in part thanks to the EU funds. This is even more prominent when we look at the main contributors to the final consumption expenditure; Households, the largest contributor to final consumption (71.8% of total) grew by 7.7% Q4 2021 vs. Q4 2020. At the same time, General Government, which takes the remaining 28.2%, had an increase of 14% in the same time period. Gross fixed capital formation increased by 0.8% YoY. It is expected that this will continue growing in 2022 as more funds are used from the EU (e.g. Next Generation EU instrument).
At the same time, Export of goods and services increased markedly, with a growth of 31.7% YoY. Breaking this down further, the export of goods increased by 24.7% YoY, while the export of services increased by 49.1% YoY. This can be attributed to the strong recovery of the tourism industry, as well as improving economic conditions in Croatia’s main trading partners. Import of goods and services also increased, growing by 16.4% YoY. Breaking this down even further, import of goods increased by 15%, while import of services grew by 23.8% YoY. In total, exports outweigh the imports in Q4 by HRK 8.7bn, leading to positive net exports.
If we were to look at the yearly levels, in total, the GDP increased by 10.4%, and in current prices, amounted to HRK 431.45bn (EUR 57bn). The aforementioned increase in GDP is the largest in the country’s history (so far, 1997 was the best year with a 6.1% GDP growth).
The recovery and growth experienced in 2021 should continue, as the current pandemic measures are relaxed, the next tourist season is coming (which is projected to be similar to or better than 2019), strong saving rates and solid personal consumption numbers continue supporting further growth.
Croatian GDP, Real Growth Rates (%, YoY)*
*Quarterly Gross Domestic Product, seasonally adjusted real growth rates