Finance Minister Zdravko Maric said on Friday that the contraction of Croatia's Gross Domestic Product by 10% was as expected, however, a decline in consumption was higher than expected, and on the other hand, a decline in investments was lower than expected.
The minister said that the contraction of the export of services of “only” 45% was a positive surprise.
Earlier on Friday, the State Bureau of Statistics (DZS) published its initial estimate of economic growth showing that GDP fell by 10% in Q3 year on year.
That is lower than estimated by seven analysts, polled in a survey for Hina, who on average estimated a fall of 10.4%, with their forecasts ranging from -9.5% to -11%.
The 2020 Q3 contraction is lower than the record 15% fall in the second quarter.
Croatia entered a recession for the first time since 2014.
According to today’s figures, household consumption sunk by 7.5% in the third quarter year on year.
Gross fixed capital investments fell by 3% y-o-y.
Maric said that the 3% fall in investments is “more or less good news”.
The minister highlighted the challenge of high dependence on imports and said that some changes must be made to reduce this dependence.
Considering the statistical data for the first three quarters of 2020 and projections for the remaining quarter and taking into account a lockdown of a part of the economy in the coming weeks, Maric said that the government stuck to its projection of a downturn of 8% for the whole of 2020.
The data show that in the first three quarters Croatia’s economy contracted 8.4%.
Maric said that the closure of some businesses until 21 December could not be compared to the lockdown in Q2 2020.
Asked by the press about compensatory measures for the businesses supposed to be closed in the coming weeks, Maric said that the measures to offset the consequences of the lockdown would be presented next week.
The basic postulate of those measures is not to encourage businesses not to work, and grants are given to those who are prevented by the current circumstances from doing business.
Maric commented on the example of restaurants, explaining that they can prepare and deliver food although they cannot receive guests on their premises.
