CEIZ index for May 2022: Strong annual GDP growth in the second quarter

August 1, 2022

In May 2022, CEIZ index recorded a drop of 4.9 index points compared to the same month in 2021. At the same time, the index value slightly decreased by 0.36 index points compared to the previous month. When observing individual index components, three index components (real retail trade, the number of tourist arrivals, and state budget income from VAT revenues) recorded higher seasonally adjusted value in May compared to April 2022, with annual growth rates reaching between 4.3 percent (real retail trade) and 202 percent (the number of tourist arrivals). Volume of industrial production index recorded a lower seasonally adjusted value in May.
The described index movements suggest that the economic activity measured with quarterly GDP change rates in the second quarter of 2022 is accelerating compared to the same period last year, mainly due to positive index movements in April 2022. Based on the index movements, it can be estimated that the Croatian economy, in the second quarter of 2022, will grow by 6.8 percent compared to the same quarter in 2021. It is important to note that we will be able to make conclusions about the business cycle in the second quarter of 2022 with greater certainty when CEIZ index value for June becomes 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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