Research Detail
| 2023/09/15 / Erste Group Research |
GDP outlook affirmed, resilient inflation pressures Solid momentum in 1H23 has been confirmed by the 2Q GDP figures as the economy expanded 1.1% q/q (s.a.) and 2.7% y/y. Domestic demand kept up a supportive tone, with private consumption showing some acceleration and investments holding ground. Export and import volumes shrank due to the goods side, while services continued to expand, again yielding a positive net export print. We affirm our call at 2.6% for 2023, Domestic demand should remain supportive, with a recovering real income and EU-funded investment profile. Tourism support should fade to an extent amid a higher base, while the relatively weak EU growth outlook weighs on external demand. In recent months, inflation moderation slowed down considerably (August 2023, 7.9% y/y), reflecting ongoing pressures in food and service segments and forcing an upward revision of average inflation towards 8%. The fiscal position remains in check, as the budget performance remains supported by strong nominal GDP growth, suggesting limited fiscal risks for 2023 and allowing fiscal space for anti-inflation or some pre-election spending. Yields and spreads mostly moved in a narrow band, former suggesting 10Y rate slightly below 4%, with the latter sticking in the expected 130-140bp region. |
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General information
| Author | Erste Group Research |
| Date | 2023/09/15 |
| Language |  |
| Product name | CEE Country Macro Outlook |
| Topic in focus | FX, Macro/ Fixed income |
| Economy in focus | Croatia |
| Currency in focus | Croatian Kuna |
| Sector in focus | - |
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