Due to the COVID-19 pandemic, many countries had to take measures to mitigate its economic consequences. The measures for restricting the economic activities and the movement of people have affected the aggregates of quarterly national accounts as well as the quality and availability of many data sources that are commonly used in estimating the gross domestic product (GDP). Data show that the pandemic has largely led to a slowdown in Croatian economy since mid-March 2020.
However, economic activity accelerated sharply in the first quarter of 2021 compared to the previous quarter, from which it can be concluded that the economy is recovering. The first estimate shows that the quarterly GDP decreased in real terms by 0.7% in the first quarter of 2021 compared to the same quarter of 2020, which is a much milder decrease than in the fourth quarter of 2020, when it amounted to 7.2%.
| X-axis | 2008 crisis | 2020 crisis |
|---|---|---|
| -1 | Q3 2008 | Q4 2019 |
| 0 | Q4 2008 | Q1 2020 |
| 1 | Q1 2009 | Q2 2020 |
| 2 | Q2 2009 | Q3 2020 |
| 3 | Q3 2009 | Q4 2020 |
| 4 | Q4 2009 | 1Q 2021 |
The first estimate shows that the quarterly gross value added (GVA) decreased in real terms by 0.8% in the first quarter of 2021, as compared to the same quarter of 2020, based on non-seasonally adjusted data. The quarterly decline in GVA was recorded in most of the activities and it was mostly influenced by Wholesale and retail trade, Transportation and storage, Accommodation and food service activities, as well as Real estate activities. A possible larger decline in GVA was partially offset by an increase in Manufacturing and Construction.
In the first quarter of 2021, epidemiological measures of the closure and restriction of a part of economic activities were still in force, which had a strong impact on the decline in tourism activities in that quarter as well. The number of tourist arrivals and nights in commercial accommodation establishments continued to decline compared to the same period of the previous year.
Industrial production continued to increase strongly in the first quarter, and the activities that had the largest increase in the first quarter of 2021 were the following: Manufacture of chemicals and chemical products, Manufacture of basic metals, Manufacture of fabricated metal products, Manufacture of computers and electronic equipment, Other manufacturing and Manufacture of electrical equipment.
The increase was recorded in all Construction activities: Construction of buildings, Civil engineering and Other specialised construction activities.
In the first quarter of 2021, household consumption declined by 0.4%, which was a somewhat milder decline than in the previous quarter. The decline in growth rate of 0.4% was mostly affected by the decrease in the turnover from catering services of 40%, the decrease in the turnover from transport services of 35% (due to the decrease in passenger kilometres) and the decrease in recreation and culture services of 3.0%, not only due to the reduced turnover in travel agencies, sports activities, gambling and betting activities, but also due to the reduction of imputed rent. On the other hand, there was an increase in turnover of 4.8% in retail trade – via mail order, catalogues, internet and television.
Gross fixed capital formation increased by 4.6% in real terms in the first quarter of 2021, which mitigated an even larger decline in GDP. The increase in gross fixed capital formation was accompanied by a significant increase in the volume of construction works and, to a lesser extent, an increase in the volume of plants and equipment.
The impact of the COVID-19 pandemic on global economy was also reflected in a large decline in trade flows between the Republic of Croatia and other countries. Due to the decline in travel, transport and other business services, a decline in the import and export of services was also noticeable. In contrast, an increase in the import and export of goods was present, due to the intensification of trade in goods.
