(Photo: Igor Kralj/PIXSELL) (Photo: Igor Kralj/PIXSELL)

The national statistical office will release at the end of next week the first estimates of gross domestic product for the third quarter - which expects to see a drop of 10.4 percent on the year.

This will mark the second quarter in a row of decline on the year, which means the country has entered a recession.

The decline is mainly due to weak personal consumption, which is the largest component of GDP. Data from the national statistical office show that retail trade turnover fell by nearly eight percent in the third-quarter compared to the same period last year.

Even though the summer tourist season was slightly better than expected at the start of the coronavirus crisis, the decline in tourist turnover was quite sharp - especially when compared with a record-breaking 2019.

And looking further ahead, because of the second wave of coronavirus spreading in Croatia and Europe, analysts also expect an economic decline in the fourth-quarter compared to the previous year.

It is expected that holiday spending and tourist activity will weaken due to epidemiological measures.

Economic analysts on average estimate that the entire 2020 the economy could decline by 9.2 percent - which would be greater than the 2009 financial crisis when the GDP dropped by a record 7.4 percent.

And while the drop in GDP in 2020 will likely be deeper than during the global financial crisis, it is expected that this recession will be much shorter - with economic recovery expected sometime next year.

Source: HRT