CEIZ index for December 2021: 10.9 percent GDP growth in 2021

February 17, 2022

In December 2021, the CEIZ index increased by 4.75 index points compared to the same month in 2020, while compared to the previous month, the index increased by 0.63 index points. When observing the index components, compared to November 2021, the number of tourist arrivals, volume of industrial production and real retail trade registered a higher seasonally adjusted value in December, while state budget income from VAT revenues recorded a lower value. The average value of the CEIZ index in the fourth quarter of 2021 was lower by 0.67 index points compared to the third quarter, which suggests that the economic activity, measured in GDP quarterly change rates, decelerated in the fourth quarter compared to the third quarter. Considering the index value, GDP will record an increase of 11.9 percent in the fourth quarter of 2021 compared to the fourth quarter of 2020. The CEIZ index movements also suggest an annual GDP growth of 10.9 percent for the entire year of 2021. 

* 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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