Croatia's industrial production increased by 3.1 percent in June 2018 compared with June 2017, posting its first increase after three months of decline, data released by the state statistics bureau on Tuesday showed. Compared with May, industrial production jumped by 4.5 percent.

Industrial production has been very unstable since the end of 2017, recording year-on-year decreases in six out of the last eight months. During that entire period, it increased only in February, by 3.3 percent, and in June, by 3.1 percent.

“The latest data on the volume of industrial production in June has exceeded our expectations, and also market expectations,” Raiffeisenbank Austria (RBA) analysts said in their comment of the report.

Compared with June 2017, energy production increased the most, by 12.1 percent, followed by production of consumer non-durable goods (3.6 percent), intermediate goods production (1.5 percent) and capital goods production (0.7 percent). On the other hand, production of consumer durables dropped by 7.9 percent.

Over the first six months of 2018 industrial production inched up slightly by 0.4 percent year-on-year, which RBA analysts described as a modest annual growth rate.

“However, the second quarter of the year saw a slowdown in annual decline rates. Compared with the first quarter, industrial production grew by 4 percent,” they added.

RBA analysts said they expect that the industrial production growth for the whole of 2018 will end up being somewhat lower than last year, when it grew by 1.9 percent, which would means that the annual growth is slowing down for the second year in a row.

“Stronger growth rates require stronger competitiveness of the entire economy, so that growing domestic and foreign demand can be met for the most part from domestic sources,” they said.

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