ZAGREB, 30 March 2022 - Expectations for Croatia's economy improved in March however, uncertainty prevails due to the war in Ukraine which is bothering managers and consumers in the EU and the euro area, triggering a wave of pessimism, shows a report released by the European Commission on Wednesday.
The Economic Sentiment Indicator (ESI) for Croatia picked up in March by 1.5 points compared to February and now stands at 109.1 points.
The strongest improvement was seen in managers' expectations in the industry, improving by 2.9 points with consumer confidence also improving by 1.7 points.
Given the high inflation, trade confidence slumped with the indicator declining by 3.5 points compared to February.
Construction confidence declined by 2.6 points while expectations in the services sector went down by 0.7 points.
In the next few months, managers expect employment to fall, which is shown in the decrease Employment Expectations Indicator of 3.3 points.
The Economy Uncertainty Indicator eased significantly compared to the previous two months, rising by 5.1 points.
Pessimism in Europe
A wave of pessimism has caught managers in the EU and euro area following the Russian invasion of Ukraine, the problem with supply chains and the energy and raw materials price hikes.
The ESI in the EU and the euro area dropped substantially by 5.3 and 5.4 points respectively from February.
Consumers are concerned with the high price of energy and a surge in living costs. Consumer confidence slumped by 9.4 points in the EU and 9.9 points in the euro area.
Retail trade confidence deteriorated by 4.9 points in the EU and 5.3 points in the euro area.
Industry confidence fell by 3.4 points in the EU and 3.7 points in the euro area.
Construction confidence remained broadly unchanged.
Services confidence (+1.3) improved for the second month in a row in the EU, driven by managers’ markedly more positive assessment of past demand, and thanks to epidemiological measures being eased. In the euro area it improved by 1.5 points.
The Employment Expectations Indicator decreased (-1.1) in the EU and by 0.9 points in the euro area.
The European Commission’s Economic Uncertainty Indicator rose abruptly in March (+10.7 points to25.8), "driven by growing uncertainty about the impact of the war in Ukraine on the future economic situation of consumers and businesses."
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