Citing available monthly figures, they said that a fall in economic activity could be recorded in the final quarter of 2012 following stagnation in the third quarter.

In the third quarter of 2012, GDP dropped 1.9% year on year, compared to the annual decline of 2.2% in the second quarter. In the first three quarters of the year GDP fell 1.8% in real terms in relation to the corresponding period of 2011 and during that time only exports stagnated while all other GDP components had a negative impact on the aggregate economic activity, HNB analysts explained.

October and November 2012 saw a continuation of negative trends on the labour market, a further weakening of consumer confidence, a decline in retail sales and a drop in industrial output.

On the upside, exports picked up and October saw a rise in construction activity, but the analysts noted that it was hard to say whether that indicated a reversal of the downward trend.

Exports in October and November rose 8.2% compared to the third quarter, fuelled by increased ship exports, while imports dropped 4.3%. Negative trends on the labour market led to a rise in unemployment, and salaries also continued to fall. Consumer price inflation slowed down from 4.8% in October to 4.4% in November, and basic inflation dropped from 2.3% to 2.2%.

Monetary trends were marked by the continued high liquidity of the banking system, a drop in loans and deleveraging.

The HNB said that the recent downgrade of Croatian bonds did not cause any substantial increases in risk premiums, but noted that they remained relatively high in comparison to premiums in other Central and Eastern European countries.