Macroeconomic Forecast Croatia

Though the contraction in Croatian industrial output during April surpassed that seen the previous month, it marks a significant slowdown in the pace of decline since the beginning of the year. Indeed, the latest industrial output reading provided by Crostat shows production contracting by 7.1% y-o-y in April, compared to 6.6% in March, but marking a substantial improvement from the 21.2% and 12.9% decline seen in January and February, respectively. Given our view that domestic consumption and investment spending will plunge this year, set against a fairly dire global economic backdrop, we expect domestic production to show a full-year contraction in 2009 of 5.4%.

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