Saturday, 30 May 2020

Record Consumption Drop in April, Sharp Decline for Croatian Economy

As Poslovni Dnevnik writes on the 29th of May, 2020, in April this year, retail consumption in Croatia sank by a record 25.5 percent when compared to the same month last year, and industrial production also recorded a large decline, which heralds a sharp decline for the Croatian economy in the second quarter.

The Central Bureau of Statistics (CBS) released a report on retail trade turnover on Friday, and according to calendar-adjusted data, consumption fell 19.8 percent in April compared to the previous month, while, as stated, it sank 25.5 percent compared to April last year.

This is the second month in a row in which consumption has fallen under the influence of the ongoing coronavirus crisis, as it was 7 percent lower in March than in the same month last year. The CBS also announced on Friday that industrial production fell by 11 percent in April compared to the same month last year, its biggest drop since June 2009, when it sank 13.3 percent.

This is the sixth month in a row that production has been falling, and it doesn't bode well for the Croatian economy.

This sharp drop in consumption and production across Croatia is the result of measures aimed at preventing the spread of the new coronavirus, which came into force in the second half of March.

This slowed down growth for the Croatian economy in the first quarter, meaning that gross domestic product (GDP) grew by a mere 0.4 percent on an annual basis, the slowest since the end of 2014, CBS data released recently showed.

In the second quarter, a sharp decline in the Croatian economy is expected, followed by a recession, ie, a decline in the Croatian economy for two consecutive quarters.

In a recent survey conducted by Hina, analysts expect Croatia's GDP to fall by 20.5 percent in the second quarter when compared to the same period last year, and their estimates of the fall range from 15 to 25 percent.

This is significantly more than 8.8 percent, the largest drop in GDP so far, recorded in the first quarter of 2009 at the beginning of the financial crisis.

For more on the Croatian economy, follow our lifestyle section.

Saturday, 30 March 2019

Croatia Spends the Most on Food in the European Union

According to food expenditure statistics, Croatia is still spending significantly more than the European average, with the British paying the least towards food and drink in all of Europe.

As Poslovni Dnevnik writes on the 30th of March, 2019, expenditures for transport of the average Croatian family were equal to the cost of housing and for the first time, they reached fifteen percent of the average household budget. Based on the Household consumption survey, which is otherwise conducted every three years, the Central Bureau of Statistics reported that the average Croatian family spent 82,530 kuna per household in 2017, which is a monthly cost of about 6,800 kuna.

Croatia takes first place when it comes to the amount allocated to food in the household budget, but it is about five percentage points less than ten years ago when every third kuna was spent on food, Večernji list writes. The other countries which follow Croatis are Romania, where 26 percent of the typical household budget goes to food, while in Serbia, which is considered a third country, yet remains an EU candidate, that stands at 22 percent.

According to data on food expenditures, Croatia is still significantly above the European average, where 12 percent of household budgets typically go on food and drink, and in developed western economies, that figure is usually between 7 and 10 percent. The dominance of food expenditures is a feature of poorer countries with lower wages. Food prices in Croatia are similar, if not more expensive than in Western Europe, while salaried employees receive three to four times lower salaries, which ensure a much higher quality of life and go on including things such as outings, recreation, travel, and further education.

In Croatia, there is still one item where the standard of living has remained the same to a certain extent, and that is the typical cost of housing and the consumption of energy, to which 15.7 percent of the household budget goes, while at the EU level, the energy bills and rent account for a much higher 24 percent of the typical household budget. The British pay the leasr for food, and it typically accounts for a mere 7.2 percent of the British household budget, yet on the other hand, 27 percent of a typical British household budget is spent on various housing costs. Only Cyprus, Lithuania and Malta have lower housing costs than Croatia.

When looking at nominal amounts, just a couple of years ago, the average Croatian household spent 21,353 kuna per year on food and drink, of which the highest costs are for meat, costing about 6,700 kuna, and non-alcoholic beverages, costing 1,900 kuna, these beverages were mostly coffee, mineral water and various types of juices. In Croatia, at least according to the latest statistics, there is actually less smoking and drinking going on, and alcohol and cigarettes have fallen below three percent of the typical household budget to 2.9 percent (2,421 kuna per year), for the first time ever.

In Croatia, communication costs continue to above the EU average, on which 2.5 percent of the household budget is spent. Bulgaria and Serbia are the most similar to Croatia in terms of spending, while communication costs in other post-socialist countries is significantly cheaper and accounts for about three percent of the typical household budget. The average Croatian family pays 4,113 kuna annually for telephone services, which is almost twice as much as it allocates for health care services. For transport, about 13,000 kuna is spent annually, while clothing and footwear have about 6,000 kuna spent on them.

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