CEIZ index for June 2023: Annual GDP growth continues in the second quarter

August 14, 2023

In June 2023, the CEIZ index decreased by 0.57 index points compared to June 2022. At the same time, the index value decreased by 0.01 index points compared to the previous month. When observing individual index components, a higher seasonally adjusted value in June 2023 compared to May 2023 was recorded by two index components: volume of industrial production and state budget income from VAT revenues. Real retail trade and number of tourist arrivals recorded a lower monthly seasonally adjusted value. All four index components registered a growth compared to June 2022.

The described index movements suggest that the economic activity of the Croatian economy accelerated mildly in the second quarter of 2023 compared to the previous quarter. Based on the index movements, we can estimate the Croatian economic growth rate at 2.9 percent in the second quarter of 2023 compared to the same quarter last year. 

* Monthly assessment of GDP growth rate based on CEIZ index value is indicative and should be used primarily as information on the current condition and trend of the business cycle in Croatia.

What is CEIZ?

Coincident 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.

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