ZAGREB, May 29 (Hina) – In Q1 2020 Croatia’s economy grew by 0.4% compared to the same period of 2019, which is the slowest growth rate in the last six years and a result of the impact of the coronavirus pandemic.
According to preliminary figures from the national statistical office (DZS), released on Friday, GDP saw an annual increase of 0.4% in Q1, which was the 23rd consecutive quarter GDP had grown albeit at a much slower pace than in the previous three months when it went up by 2.5%.
The 0.4% growth rate is also the slowest growth rate since the last quarter of 2014 when the economy saw an annual growth of 0.7%.
Consumption slows down, export and import down
The slowing down of GDP growth is due to a slowing down of household consumption growth and a decline in the export of goods and services, the DZS report shows.
The coronavirus pandemic and restrictions imposed to curb its spread started negatively affecting economic activity in the second half of March, which led to a decrease in consumption.
Retail turnover in March dropped 7% year-on-year, the greatest decline since 2010.
Industrial output dropped by close to 5% for the fifth consecutive month while exports and imports decreased due to restrictions on economic activity and transport, for example in Italy, introduced to prevent the spread of the disease.
Household consumption grew in Q1 by 0.7% compared to the same period of last year, which is slower growth than in Q4 2019, when household consumption grew by 4%.
The export of goods and services in Q1 dropped by 3% year-on-year while in Q4 2019 it rose by 5.6%.
The export of goods rose by 0.3% while the export of services dropped by 9.4%.
The import of goods and services dropped by 5.8% on the year while in the previous quarter it went up 0.1%.
The import of goods dropped 1.6% while the import of services dropped by 25.1%.
In Q1 gross investments in fixed assets grew by 3.1% on the year, which is less than a 4% increase in the previous quarter.
In Q1 state spending grew as well, by 4.8% on the year, faster than in the previous quarter, when state spending went up 3.5%.
Statistics better than EU average
According to seasonally adjusted data, GDP in Q1 dropped 1.2% compared to the previous quarter while on the year it grew by 0.3%.
These statistics are better than the EU average. Eurostat data show that in Q1 the EU’s economy dropped by 3.3% compared to Q4 2019 and by 2.6% compared to Q1 2019.