February 28 (SeeNews) - Croatia's gross domestic product (GDP) grew by a real 2.5% year-on-year in the fourth quarter, landing somewhat below the expectations of analysts at Austria-based Erste banking group for a 3.0% increase, Erste said on Friday.
"Private consumption and investments maintained favorable support with 4% y/y increase in 4Q19 on both sides, with later disappointing a bit and confirming moderation vs. robust 1H19," Erste said in an instant comment after the country's statistical office published its first estimate for the fourth-quarter GDP earlier on Friday.
Seasonally-adjusted GDP went up 0.3% in October-December 2019 compared to the previous quarter, slower than the quarter-on-quarter growth of 0.8% in July-September.
Erste also said that inventories played a strong negative role, shaving off some 4pp from the fourth-quarter headline figure, suggesting that destocking eased pressure on the imports side. Exports have brought positive contribution by posting a 5.6% annual increase in the fourth quarter, while imports growth dynamics decelerated to 0.1% on the year.
"As 2020 outlook goes, our baseline envisaged healthy domestic demand footprint, with net exports remaining a drag and being the biggest downside risk amid EU growth prospects," Erste said, adding that the outlook remains blurred by the coronavirus outbreak.
"Clearly beyond at least some transitory effect, mostly through trade channels, impact remains highly sensitive to duration, hence difficult to assess at present. Tourism would be at risk in the scenario of longer lasting travel disruption. Domestic demand is likely to be a bit more resilient. Hence, until getting a bit more clarity on coronavirus, we keep our 2020 GDP call at 2.5%, clearly highlighting downside risks to the forecast," the analysts concluded.
According to the first estimate of Croatia's statistical office released earlier on Friday, the country's GDP growth accelerated to a real 2.9% last year from 2.6% in 2018.