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ZAGREB (Croatia), August 12 (SeeNews) - Croatian think-tank Institute of Economics Zagreb (EIZ) said on Monday it is further lowering its forecast for the country's economic growth in the second quarter to 3.1% year-on-year, based on April-June data.
The previous revision was made in July when EIZ cut its GDP growth forecast to 4.0% year-on-year based on data for April and May, from 4.7% expected in June when the April reading of EIZ's Coincident Economic Index, CEIZ, recorded its highest value since the end of 2016.
In June, however, CEIZ registered its lowest level for this year, being 0.3 index points below its May reading and 0.6 index points lower than June 2018, EIZ said in its monthly index report.
"Considering that the index also had a negative value in May, a downward trend has been observed pointing to slower growth rate," EIZ said.
It added that in seasonally-adjusted terms, three out of four index components rose in the second quarter compared to the first quarter, including VAT revenues to the state budget, the number of tourist arrivals and real growth in retail trade. Industrial production, on the other hand, recorded a decline.
Seasonally-adjusted data thus indicates that the GDP grew 0.4% on a quarterly comparison basis in April-June.
The CEIZ index aims to provide timely information on the current business cycle conditions. Its value changes simultaneously with the business cycle, thus serving as an indicator of the present state of the economy.
Croatia's statistical office will release first data on second quarter GDP at the end of August.
In July, the chief economists at Croatia's top five banks increased their 2019 economic growth forecasts up to 3.0% from previously expected 2.6%, following the better than expected GDP growth of 3.9% in the first quarter of the year.
Croatia's central bank also raised in July its 2019 economic growth forecast to 3.1% from 2.5%-2.7% expected previously, saying the investment growth of both public and private sectors is expected to continue, to be coupled with higher domestic consumption.
The revisions are in line with the latest European Commission forecast, which also lifted its projection for Croatia's 2019 economic growth to 3.1% from 2.6% predicted earlier, pointing to domestic demand as the main growth driver.