18:09 / 31.05.2022.

Author: Branko Lozančić

Consumers dampened expectations for the Croatian economy in May

Annual inflation in December was the highest since October 2008

Annual inflation in December was the highest since October 2008

Foto: Marko Lukunic / PIXSELL

Expectations for the Croatian economy worsened in May, as a wave of pessimism among consumers in the face of high inflation outweighed an improved mood in retail, a European Commission report showed.

The Economic Sentiment Indicator (ESI) in Croatia fell by 0.8 points in May compared to the revised value in April and amounted to 110.1 points.

The strongest deterioration last month was sentiment among consumers, whose index fell 3.4 points from April, sliding below the long-term average of the past 20 years.

Expectations in the service and construction sectors, whose indices fell by 1.4 and 0.6 points, were also dampened.

Retail managers, on the other hand, showed optimism, expressed in a jump in the index by as much as 6.4 points compared to April. Expectations in industry, whose index rose by half a point, also improved slightly.

At the same time, business leaders are signaling a decrease in labor demand, which was reflected in a decline of the index by 3.3 points.

According to their perception, the uncertainty was alleviated compared to April, despite the rise in energy prices and problems in supply chains, so the EUI index fell by 1.3 points compared to April.

Stabilization in Europe

At the EU level, the economic climate index fell by half a point in May compared to April, while in the Eurozone it was almost unchanged.

In April, ESI fell 1.7 points in both areas.

The greatest pessimism was expressed by industry managers in both the EU and the Eurozone, whose index fell by 1.4 points each.

The mood among EU consumers also deteriorated slightly, by 0.4 points, while those in the Eurozone expressed increased optimism, expressed in a growth of the index by 0.9 points.

In the construction and retail sectors, expectations in both areas were almost unchanged.

There were no significant changes in the EU service sector either, while service companies in the Eurozone showed a hint of optimism, which was reflected in a growth of the index by 0.4 points compared to April.

Managers expect to hire new workers in the coming months, so the ESI index rose by 0.5 points in the EU and 0.3 points in the Eurozone in May.

Uncertainty is alleviated according to their perception compared to April, shown in a fall of the index in May, by 2.7 points in the EU and 3.1 points in the Eurozone.

Source: HRT

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