ECONOMIC FORECAST IN CROATIA: CROLEI index

In developed economies it is inconceivably to conduct economic, business and development policy without relying upon professional analytical methods, what finally brought to development of the whole spectrum of analytical approaches, from the simplest ones (inquiries, economic tests), across more compound (input-output tables, leading indicators approach), ali to sophisticated parameter methods and models. At this moment economic forecast in Croatia is mainly rooted in the forecast report CROLEI, which methodologically relies upon the leading indicators approach founded by the known American research institution NBER. Development of leading indicators system in Croatia started six years ago, in conditions in which it was objectively not possible, due to too short time series, to build domestic sophisticated econometric model for economic analysis and forecast.
In this paper the author stresses why is the indicators method simple and popular technique of the analysis and forecast of economic fluctuations, indicating the reasons and causes of made interventions during the last auditing at the end of 1999. Comparing behaviour of the forecast index before and after the implemented auditing, the author emphasizes numerous analytical and forecast advantages of new revised index in comparison with the past one. The quality and credibility of leading indicators domestic system increasingly grows in the course of time, what arouses optimism in view of future development of this specific forecast method in this country.