CEIZ index for September 2023: Quarterly GDP growth stagnates in the third quarter

November 28, 2023

In September 2023, the CEIZ index increased by 0.39 index points compared to September 2022. At the same time, the index value increased by 0.31 index points compared to August 2023. When observing individual index components, a higher seasonally adjusted value in September 2023 compared to August 2023 was recorded by three index components: volume of industrial production, real retail trade, and number of tourist arrivals. The state budget income from VAT revenues component recorded a lower monthly seasonally adjusted value. The components that recorded a higher monthly seasonally adjusted value also increased when compared to the same month last year.

The index movements in July, August, and September 2023 suggest that the economic activity in Croatian economy has slowed down in the third quarter of 2023 compared to the previous quarter. Based on the index movements, we can estimate that the Croatian economic growth rate will amount to 2.3 percent in the third quarter of 2023 compared to the same quarter last year, while compared to the previous quarter it will decrease mildly by -0.07 percent. 

* 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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