(Photo: HRT) (Photo: HRT)

The economy grew at a rate faster than had been expected in Q3 of 2018 in comparison to the same quarter last year. Growth was driven by the strong tourism season, bolstered further by the FIFA World Cup, said the head of the State Statistics Bureau Marko Krištof. The economy slowed slightly from last quarter, when the rate was 2.9% but exceeded expectations. A panel of economists assembled by HINA predicted growth of 2.2% to 2.5% for the third quarter.

Breaking down the numbers, Krištof said, the biggest contribution to the GDP in Q3 came from higher exports of goods and services, noting that this was in line with forecasts because the effects of tourism are the strongest in Q3.

According to seasonally adjusted data, Croatia's economy grew faster than the EU average, 1.9%, for the third quarter in a row. Excluding the one quarter in which growth was somewhat slower, Croatia would have had greater yearly growth for 13 quarters in a row, said Krištof.

Finance Minister Zdravko Marić said the numbers for the third quarter exceeded not only the expectations of leading economists but those of his own ministry, as well.

“Consumer spending was slightly below our expectations, but exports of goods and services were on target, even slightly above expectations. It was a good thing that leading economists were slightly conservative in their projections during the tourism season,” Marić said.

Croatia's economy has been growing for 17 consecutive quarters, however, SDP MP Branko Grčić says Croatia may be headed for a downturn.

“The decline in industrial output over 8 to 10 months of this year, clearly shows that Croatia is slipping towards a new crisis in a year or two," Grčić said.

He also warned that Croatia’s balance of trade was declining, reversing a largely positive trend over the past few years. Croatia was not implementing structural reforms that would drive economic growth, he warned.