CEIZ Index

CEIZ index for July 2017: GDP growth acceleration in the third quarter of 2017 

In July of 2017, the CEIZ index recorded a small increase of 0.01 points compared to June, which means that the economic activity in that month accelerated somewhat when compared to the month before. The index value itself suggests that the Croatian economy will achieve a real GDP growth rate of 2.9 percent in the third quarter compared to the same quarter of the previous year. On a quarterly basis, the index value indicates that the Croatian economy could grow by 1.0 percent in the third quarter of 2017 compared to the second quarter of 2017, which corresponds with the growth that the Croatian economy recorded in the third quarters of 2015 and 2016. It should be noted that the estimation of GDP growth in the third quarter is based only on the index value for July 2017, so its interpretation should be taken with caution. After the index values for August and September become available, the GDP growth for the quarter can be projected with greater certainty.
What is CEIZ? 

oincident Economic Index of the Institute of Economics, Zagreb (CEIZ) is a monthly composite business cycle indicator developed by the Institute of Economics, Zagreb. Its purpose is to provide timely information on the current business cycle condition. Consequently, the CEIZ index value changes simultaneously with the business cycle, thus indicating the present state of the economy. The CEIZ index was constructed by applying in parallel a dynamic factor model and a Markov switching model. Details on the CEIZ index methodology are described in the paper: Rašić Bakarić, Ivana, Marina Tkalec and Maruška Vizek, 2016, “Constructing a Composite Coincident Indicator for a Post-Transition Country”Ekonomska istraživanja (Economic Research), 29 (1), pp. 434–445.

The CEIZ index is useful in three ways. First, it is a single-number business cycle indicator containing information that would otherwise have to be accrued by analyzing a large number of economic series. Second, unlike the GDP series, it provides monthly estimates on the state of the economy, thus providing information on fine changes that took place in a short period of time. Third, the CEIZ index is available one to three months prior to quarterly GDP estimates, meaning that policy-makers and the general public can observe the current state of the economy in a timely manner.

The index is to be interpreted in such a way that the positive values represent economic growth while the negative ones represent a decreased economic activity, or rather, recession.

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