Croatia's current account deficit in 2010 amounted to HRK 654.3 million, which is the lowest current account deficit in the last ten years. Compared to 2009, the current account deficit was 74 percent lower and its share in GDP was 1.4 percent.
Citing data from the Croatian National Bank, analysts of the Centre for Macroeconomic Analysis of the Croatian Chamber of Commerce (HGK) said in their latest publication on economic movements that such developments were primarily a consequence of changes in trade in goods, which is usually the main generator of the current account deficit.
Reduced domestic demand, both personal and investment, which so far has significantly relied on imported commodities, has reduced the value of commodity imports (-0.3 percent), while commodity exports grew 18.1 percent owing to the recovery of Croatia's most important export markets.
The commodity trade deficit of EUR 5.9 billion thus dropped by 19.5 percent or EUR 1.4 billion in comparison to the year before.
However, HGK analysts warn that despite the significant growth of commodity export of EUR 9 billion, Croatia has still not reached the pre-crisis level of export. Moreover, in 2010 it recorded the lowest export value since 2006.
While having a favourable statistical impact on the movement of the components of the most important deficit sub-account, the economic crisis has negatively affected its most important counter-balance - the revenue from foreign tourism.
Record-high physical indicators, HGK analysts say, were not accompanied by an adequate rise in consumption. The income from foreign arrivals in 2010 amounted to EUR 6.2 billion, 2.2 percent less than in 2009 and as much as 16.4 percent down from 2008.
Income from foreign arrivals in 2010 was the lowest since 2005.
With a slightly higher surplus in transport services (21%) and a drop in the deficit in other services (51.6%), the surplus in trade in services nevertheless saw a minimum growth of 2.2 percent, reaching EUR 5.8 billion.
The decline of the current account deficit was also owing to a mild drop in the income deficit. The income deficit, amounting to EUR 1.6 billion, dropped by 11.8 percent, with income going up 12.5 percent and expenses going down 4.6 percent.
The current transfers component saw a surplus of EUR 1.1 billion, an increase of 6.6 percent compared to the previous year.
