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Consumption in Croatia increased the most in the last 9 years

12.12.2016  18:32

In October, spending rose 5.3 percent year on year in Croatia, which is a significantly higher growth than expected and the largest in the last nine years.

The National Bureau of Statistics (NBS) published on Friday their first assessment, according to which the turnover of retail trade where all business entities engaged in this activity - irrespective of their prevailing activity - in October, according to calendar adjusted data, nominally rose by 4.6 percent and in real terms by 5.3 percent compared to the same month last year.

This represents an acceleration of consumption growth compared to September when it rose 4.5 percent y-o-y, and the highest growth since September 2007 when spending jumped 6.6 percent.

This is a higher growth than expected. Four macroeconomists, who participated in a survey by Hina, on average had expected growth of consumption in October to be 3.5 percent y-o-y. Their growth estimates were in the range from 2.8 to 4.1 percent.

With that the positive record trend continued, given that consumption has been growing for 26 months in a row, which has not been recorded since the NBS started registering this kind of information.

''These kind of uninterrupted series of positive annual rates dating from September 2014, were strongly supported by certain improvements in the labor market. Negative inflation rates also contributed to the effect of higher disposable income, which with inflows from tourism have a positive impact on growth in retail trade'' claim analysts from Raiffeisenbank Austria (RBA) in the review of the report by the NBS.

By the end of the year they expect the positive trend in turnover in the retail industry to continue, which, they emphasize, will be supported by the absence of inflationary pressures. It could, in fact, encourage the growth of disposable income and private consumption, which should have a positive impact on GDP growth. 

''It remains, however, a fact that around 40 percent of the nominal turnover in retail trade remains focused on meeting basic needs'' RBA analysts conclude.

Today's data suggest that growth in private consumption continued at the beginning of the fourth quarter of this year.

With an increase of 3.4 per cent, private consumption was one of the most important drivers of accelerating the growth of GDP in the third quarter to 2.9 percent y-o-y, which is the fastest growth of the economy in the last eight years.


Source: Glas Istre