Petar Sorić¹
Mateo Žokalj² and
Marija Logarušić^1
1 University of Zagreb - Faculty of Economics & Business
  Zagreb, Croatia
² InterCapital Securities
  Zagreb, Croatia

INDECS 18(2-B), 241-257, 2020 DOI 10.7906/indecs.18.2.12 Full text available here.

Received: 10th January 2020. Accepted: 25th March 2020. Regular article

ABSTRACT

This article provides a starting point for the analysis of the determinants of consumer confidence in Croatia. Using Autoregressive Distributed Lag models, we analyse a wide array of macroeconomic drivers of consumer confidence. Despite the well-established fact that the Croatian economy is highly dependent of the real estate sector, consumers seem not to significantly react to real estate prices. On the other hand, we do find some evidence of a considerable long run impact of real wages, interest rates, and the general price level. In the short run, consumer confidence seems to also be responsive to stock market developments and unemployment. Overall, our estimates show that macroeconomic factors explain a lion's share of variability in consumer confidence.