HR: May industrial production declined 3.3% y/y

Industrial production brought another negative performance as headline figure declined 3.3% y/y in May (vs -2.0% y/y in April), thus landing below our expectations (EBCe: 0% y/y) and showing further deepening of the decline pace. Detailed structure revealed negative pressures across the board, where decline came from practically every sector of production, apart from the capital goods (1.8% y/y) that worked in the opposite direction. While YTD data reveals prolonged weakness (Jan-May at -3.4% y/y), going forward we expect to see gradual stabilization of the industrial production footprint, having in mind expected revival and improved developments of the external demand.