CEIZ index for March 2023: Annual GDP growth slows down in the first quarter of 2023

May 26, 2023

In March 2023, CEIZ index decreased by 1.01 index points compared to March 2022, while compared to the previous month the value mildly increased by 0.21 index points. When observing individual index components, compared to the previous month, all four index components (volume of industrial production, number of tourist arrivals, real retail trade and state budget income from VAT revenues) recorded a higher seasonally adjusted value in March 2023.

Based on index movements, it can be estimated that, in the first quarter of 2023, the Croatian economy will grow by 3.3 percent compared to the same period last year, meaning that annual GDP growth rate in the first quarter continues to slow down, which has been recorded since the second quarter of 2022. 

* 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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