GROSS DOMESTIC PRODUCT – ANNUAL CALCULATION
NOTES ON METHODOLOGY
Annual gross domestic product (GDP) and main aggregates of national accounts
This PC-Axis database presents the annual gross domestic product (GDP) and main aggregates of national accounts according to the European System of National and Regional Accounts (ESA 2010).
The data series on GDP for the period from 1995 to 2025 are available at current prices, constant prices of the previous year and constant prices of the reference year (2021 = 100).
The ESA 2010 is the European version of the System of National Accounts (SNA 2008), the worldwide methodological framework. Since September 2014, all EU member states have been applying the new methodology.
The ESA 2010 defines concepts, definitions and accounting rules that have to be applied in compiling national accounts in order to make data comparable at the international level.
Data sources and methodology
The main data sources for GDP compilation are the Register of Annual Financial Reports of Enterprises kept by Fina (enterprises, credit institutions, insurance companies and other financial institutions), the annual financial report for budgets and budgetary users, the statistical report for non-profit institutions, annual data of the Tax Administration for non-incorporated units and self-employed persons, statistical surveys, financial statistics and the balance of payments data of the Croatian National Bank, fiscal statistics of the Ministry of Finance and other available data sources.
The calculation has been done on the basis of available statistical data according to the National Classification of Activities, 2007 version (NKD 2007), at the division level at current and constant prices. Business entities are grouped within activities as institutional units and not as pure kind-of-activity units.
The total and per capita GDP in US dollar, euro and in kuna has been calculated on the basis of the total calculated GDP at current prices according to the average annual exchange rate of the Croatian National Bank (CNB) for the US dollar and the euro and population data.
Concerning the population data, the annual average of the total population has been calculated based on the data from the Census of Population, Households and Dwellings in the Republic of Croatia in 2021 and population statistics in accordance with the national accounts methodology.
Definitions and explanations
Output is defined as a market value of all produced goods and services. It is calculated by activities at basic prices, since all subsidies are treated as subsidies on products, that is, included into the calculation at the national economy level. The output includes market output, output for own final use (e.g. output of agricultural products at small family farms and imputed rents of owner occupiers) and other non-market output (output of individual non-market services produced by the government and non-profit institutions serving households as well as output of collective services produced by the government).
Intermediate consumption at purchase prices is the value of goods and services that are transformed, used up or consumed in the production process.
Value added, as an output value increase, equals the difference between output and intermediate consumption. Value added at basic prices also equals the sum of compensation of employees, other taxes on production less other subsidies on production as well as the sum of gross operating surplus and gross mixed income.
Taxes on production and imports (D2) include taxes on products and other taxes on production.
Taxes on products are taxes that are payable per unit of a given good or service produced or transacted. Taxes on products include VAT, excises, import duties and similar taxes.
Other taxes on production consist of all taxes that enterprises incur as a result of engaging in production, independent of the quantity or value of the goods and services produced or sold. They include taxes on the ownership and use of land, buildings and other constructions; taxes on the use of fixed assets; taxes on the total wage bill and payroll taxes; taxes on pollution etc.
Subsidies on production and imports (D3) include subsidies on products and other subsidies on production.
Subsidies are current unrequited payments which the general government or the institutions of the European Union make to resident producers. The main goals of granting subsidies are the impact on the level of production, the impact on product prices or the impact on production costs.
Subsidies on products are subsidies payable per unit of a good or service produced or imported. They can be specified as a specific amount of money per unit of quantity of a good or service; a specified percentage of the price per unit or as the difference between a specified target price and the market price paid by a buyer.
Other subsidies on production consist of subsidies which resident producer units may receive as a consequence of engaging in production. The following examples are included: subsidies on payroll or work force, subsidies to reduce pollution, grants for interest relief made to resident producer units, even when they are intended to encourage capital formation.
Compensation of employees (D1) includes all income in cash or in kind that employees received as compensation for their work and all employers' social contributions. Employers’ social contributions include compulsory and voluntary social contributions. Remuneration to employees includes the following: commuting costs covered by employers, housing and family separation compensations, children’s allowances, special holiday supplements, jubilee awards etc. Gross wages and salaries include tips in restaurants, hairdressing salons, taxis and for similar services. The calculation of the compensation of employees at current prices is based on data from regular surveys of the Croatian Bureau of Statistics.
Gross operating surplus is a residual category of value added by activities calculated by subtracting the compensation of employees and other net taxes on production from gross value added. This item is created in the non-financial and financial sector and the household sector. In the housing activity of owner-occupiers (imputed rent), the net operating surplus was estimated at 2.5% of the total net value of dwellings. In non-market activities, the gross operating surplus equals the consumption of fixed capital.
Mixed income is an alternative term for the operating surplus of unincorporated enterprises, as it is impossible to distinguish between capital income and labour income.
Implicit deflator is an index that is used to measure the extent of price level changes or inflation in the economy. It is calculated by dividing data at current prices by data at constant prices.
Gross domestic product at market prices expresses the value of all goods and services of resident units. GDP by production method equals output at basic prices less intermediate consumption at market prices plus taxes on products and minus subsidies on products. Gross domestic product by income approach equals the sum of compensation of employees, net taxes on production (taxes on production less subsidies on production), gross operating surplus and mixed income. By expenditure approach, gross domestic product equals the total domestic consumption and the difference between the export and import of goods and services with the rest of the world. Domestic consumption includes resident household expenditure (national concept), expenditure of non-profit institutions serving households, expenditure of the general government and gross capital formation.
Final consumption expenditure is composed of aggregates of individual consumption expenditure and collective government consumption expenditure. Individual consumption is composed of household final consumption expenditure, expenditure of non-profit institutions serving households (NPISHs) and individual government expenditure. Individual government expenditure comprises payments for non-market government services (education, health, social care, culture, sport, etc.) and market goods and services (pharmaceutical and therapeutic products, health resort services, etc.). Non-profit institutions serving households (NPISHs) consist of NPIs, which provide goods and services to households, either free of charge or at prices that are not economically significant (such as political parties, trade unions, churches or religious communities, social, cultural, recreational or sport clubs, charity organisations or aid agencies, etc.). Collective government expenditures consist of expenditures on administrative, defence, economic, R&D and other non-market government services.
Household final consumption expenditure consists of residential household expenditure on consumed goods and services.
Household final consumption expenditure is calculated on the basis of regular surveys on retail trade turnover and on hotel and restaurant turnover, as well as of the Household Budget Survey carried out by the Croatian Bureau of Statistics.
Household final consumption expenditure according to the national concept (P31_S14_NC) is calculated as the sum of household final consumption expenditure according to the domestic concept (P31_S14_DC) and final consumption expenditure of resident households abroad (P31_S14_W1) minus final consumption expenditure of non-resident households on the domestic market (P31_S14_W0).
Household final consumption expenditure according to the domestic concept is broken down by durability into durable, semi-durable, and non-durable goods and services, while by purpose it is classified into 13 main divisions of the COICOP 2018 classification.
These data are published for the first time at the national level and cover the period from 1995 to 2025.
Data on the government final consumption expenditure and data on the final consumption expenditure of non-profit institutions serving households (NPISH) were calculated using the annual financial reports on the revenue and expenditure of the budget and budgetary users and of non-profit institutions, as well as the Ministry of Finance data on the general government.
The Act on Financial Operations and Accountancy of Non-Profit Organisations (NN, Nos. 121/14 and 114/22) comprehensively regulates the system of financial operations, accounting, and the supervision thereof for non-profit organisations. The Act mandates the submission of financial reports for all non-profit organisations, with requirements tailored to the level of revenue and the value of assets.
This Act regulates financial reporting, accounting system and supervision of financial and accounting operations of non-profit institutions. It prescribes that all non-profit institutions are obligated to submit financial reports according to their level of revenues and assets value.
Thus, in 2015, in addition to the Report on Revenues and Expenditures (PR-RAS-NPF form) and the Balance Sheet (BIL-NPF form), the Annual Financial Report on Revenues and Expenditures (G-PR-IZ-NPF form) was submitted for the first time, according to the above-mentioned legal provisions for non-profit organisations.
Fixed capital stock, sometimes referred to as fixed assets, represents the ultimate result of entries in the production, distribution and use of income and accumulation account. It is the value of all produced fixed assets.
Gross fixed capital stock represents the value of aggregated gross investment in fixed capital stock at constant prices during the expected life of assets. It is valuated at purchase prices of new assets at a particular moment (usually at the end of the year). The gross fixed capital stock does not take into account the decrease in the value of assets due to the use of assets in the production process (consumption of fixed capital).
Net fixed capital stock is the gross capital stock less the cumulative value of the consumption of fixed capital.
Consumption of fixed capital is the cost of production during a certain accounting period. It represents the decline in the value of fixed capital stock used up in production. The fixed capital stock, when used in production, is subject to normal wear and tear and foreseeable obsolescence due to the introduction of new versions of the same kind of stock, including a provision for losses of fixed assets as a result of accidental damage that can be insured against.
The decline of the value of capital stock caused by other flows that are not part of GDP (outside production boundaries), unforeseeable accidents and similar negative changes in the stock value (acts of war, natural catastrophes, etc.) as well as nominal holding losses caused by the revalorisation of fixed capital stock are not included in the consumption of fixed capital.
Although the consumption of fixed capital constitutes a negative change in the value of fixed assets, it also represents income. It is also one of the important input elements of the productivity indicators of fixed capital stock.
Gross capital formation (P5) is composed of gross fixed capital formation (P51G) and changes in inventories and acquisition less disposal of valuables (P5M). Changes in inventories and acquisition less disposal of valuables (P5M) include changes in inventories (P52), acquisition less disposal of valuables (P53) and statistical discrepancy (the difference in the GDP calculation by production and expenditure approach).
At the Eurostat level, as in most EU Member States, the changes in inventories and acquisition less disposal of valuables (P5M) indicator is not published in constant prices of the reference year (chain-linked series), for methodological reasons.
Due to the non-additivity of the chain-linked series, such data are not suitable for interpretation in absolute amounts and can lead to wrong conclusions by the user.
Chain-linking involves the loss of additivity for all years except the reference year and the directly following year, because these are the only periods expressed in prices of the reference year. For other years, the chain-linked components of the GDP will not sum to the chain-linked GDP.
In addition, chain-linking cannot be performed directly on variables that can take both negative and positive values.
For the above-mentioned reasons, the data for changes in inventories and acquisition less disposal of valuables (P5M) are published only in current and constant prices of the previous year.
Gross fixed capital formation consists of investments into new fixed capital formation, costs of transactions of used fixed assets and of the acquisition of intangible assets. Changes in inventories are calculated for work-in-progress and finished goods, stocks of commercial goods in stores, and stocks of raw material, spare parts etc.
Gross fixed capital formation is broken down in more detail according to the main type of assets.
Data on import and export of goods and services are based on the balance of payments data of the Croatian National Bank (CNB). The application of the Balance of Payments Manual, 6th edition (BPM6), affected some most important changes in the balance of payments current account. Data on export and import of goods include only the goods that are subject to the change of ownership between residents and non-residents. Goods imported and exported for finishing, working or processing are no longer considered the subject of trade in the balance of payments.
On the other hand, the services account includes manufacturing services on goods owned by others (finishing, working or processing). Thus, the balance of payments includes only the net value of the service that includes the compensation associated with the finishing and not the value of the finished goods.
The export and import of goods and services is broken down in more detail according to groups of countries (EU Member States, EU Member States of the euro area, EU Member States outside the euro area and countries outside EU).
Detailed methodological explanations can be found on the website of the Croatian National Bank.
GDP REVISION IN 2026
The revision of data is conducted to achieve consistency in national accounts data for the whole time series. The 2026 revision included the following elements of methodological improvements: a revision due to the inclusion of final results from GNI reservations (TSR 2 – the inclusion of VAT fraud without purchasers' complicity, and TSR 5 – non-collected VAT) a revision of the current government expenditure (account 193) and a revision of the final consumption expenditure of the general government (P.3), a revision of subsidies on products (D.31), a correction of a compilation error in the calculation of intermediate consumption by entrepreneurs, a revision of the gross fixed capital formation, and a revision of the export and import of goods and services based on the balance of payments data. The revision refers to the GDP data series for the 2011 – 2024 period, while an estimate of gross domestic product was done for 2025.
The data series of the export and import of goods and services is updated with the balance of payments data from August 2026. As of 2024, statistics on the import of goods from other EU Member States include data on distance sales provided by the Tax Administration of the Republic of Croatia. Based on Eurostat's recommendation, data on import related to distance sales from other EU Member States (OSS – One-Stop Shop) should be compiled and included in national statistics on import. As of 2015, data on the import of services on distant sales are included.
Constant prices
The calculation of gross domestic product at constant prices is a very important indicator of measuring the dynamics and level of economic development deprived of the influence of prices. In the calculation of GDP at constant prices, the concept of double deflation is used (which means that GDP in constant prices is calculated as the difference between the deflated gross output and intermediate consumption). Current values are deflated by the price indices of the previous year (that is, GDP at constant prices is expressed in the prices of the previous year). For deflation purposes, industrial producer price indices, services producer price indices, agricultural price indices, consumer price indices, gross wages and input indicators are used. The calculation was made at the division level of the National Classification of Activities.
Individual components of the GDP by expenditure category at constant prices were calculated by deflating the current market price data using chain price indices (that is, GDP at constant prices is expressed in the prices of the previous year).
Household consumption data at constant prices were calculated using disaggregated indices of consumer prices.
For government expenditure, an assumption of constant productivity was applied. Therefore, the wage and salary indices at constant prices were calculated by dividing the data on current expenditure on wages and salaries by the index of the number of persons employed. Expenditure on other goods and services were deflated by the corresponding consumer price indices and producer price indices of industrial products.
The export of goods was deflated using the industrial producer price indices on non-domestic market and the Fisher-type unit value indices. The import of goods was deflated using industrial producer price indices on non-domestic market of partner countries and the Fisher-type unit value indices.
The export of services was deflated by the relevant price indices for goods on the domestic market. The import of services was deflated by the relevant price indices on the markets of the most significant trading partner countries.
Gross fixed capital formation data were deflated by producer price indices of domestic and imported capital goods and by an implicit deflator for construction according to the GDP production approach.
Changes in inventories of finished goods and work in progress were deflated by producer price indices. Changes in inventories of raw materials were deflated by producer price indices and import price indices of raw materials. Corresponding consumer price indices were used for the deflation of changes in inventories of goods purchased for resale.
Abbreviations
CNB Croatian National Bank
COICOP 2018 Classification of Individual Consumption According to Purpose
EU European Union
Eurostat Statistical Office of the European Union
GNI gross national income
NKD 2007 National Classification of Activities, 2007 version
VAT value added tax