CEIZ index for April 2022: GDP annual growth continues in the second quarter of 2022

June 28, 2022

In April 2022, CEIZ index recorded an increase of 0.73 index points compared to March 2022. At the same time, compared to April 2021, the index value decreased by 8.6 index points, which is a consequence primarily of the exceptionally high value of the CEIZ index in April 2021, which was the first month in which the economic activity measured by the index recovered significantly after the economy was closed due to the implementation of epidemiological measures. When observing the individual index components, volume of industrial production and number of tourist arrivals recorded a higher seasonally adjusted value in April 2022 compared to the previous month, while state budget income from VAT revenues and real retail trade recorded a lower seasonally adjusted value.

The described index movements suggest that the economic activity, measured with annual GDP change rates, in the second quarter of 2022, compared to the second quarter of 2021, has continued to record a growth rate similar to the one registered in the first quarter of 2022. At the same time, economic activity at the very beginning of the second quarter of 2022 compared to first quarter of 2022 is displaying a mild acceleration trend. A more precise assessment of the business cycle in the second quarter of 2022 will be possible when the index values for May and June 2022 become available.

* 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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