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."

For more, make sure to check out our business section.

ZAGREB, 30 March 2022 - The three members of the Bridge party in the Split City Council have terminated their cooperation with Mayor Ivica Puljak over his failure to resolve the case of his deputy, Bojan Ivošević, and Bridge's local branch has called for a fresh election.

Ivošević has been indicted for threatening an editor of the Slobodna Dalmacija daily.

"Mayor Puljak's actions have presented us with a fait accompli, irreparably compromising our cooperation with him and the executive authority. That's why we are compelled to terminate our cooperation," Bridge Councillor Josip Markotić told a press conference in Split.

Markotić said the only way out of the present situation was a fresh election, and not just for the City Council but also for Mayor. "We insist on this election," he stressed, adding that the election could be held together with local elections in the city scheduled for June.

Markotić said his party had tried to meet with the mayor to discuss the new situation, but "a meeting never materialised."

The councillors from the Smart for Split and Dalmatia party, the We Can! platform and the Ramljak-Marić Independent List said on Tuesday they were suspending their cooperation with Mayor Puljak over his indecision to resolve the Ivošević case.

Markotić said that Bridge had talked to these councillors and they had agreed on their reactions together, "the only difference being that we insist on a fresh election."

Responding to questions from the press, Markotić said they could restore cooperation with the mayor if Ivošević resigned.

For more, check out our dedicated politics section.

ZAGREB, 30 March 2022 - Independent Democratic Serb Party (SDSS) president Milorad Pupovac said on Wednesday the party supported the announced government reshuffle, adding that it was in the interest of all coalition partners, and that Deputy Prime Minister Boris Milošević would prove that he was an honest man.

Speaking to the press, Pupovac said Milošević had the party's "full support in everything he is going through because we believe that what he did was part of his mandate as an MP."

Milošević is under investigation by the USKOK anti-corruption office on suspicion of wrongdoing in the allocation of grants to businesses in state-assisted areas in 2018.

Asked if the SDSS would cause problems if Milošević was replaced as part of the government reshuffle, Pupovac said a reshuffle was in the interest of all ruling coalition partners and the government as a whole and that everyone would contribute in their own way.

He said the prime minister would have the last say on the reshuffle and recalled that Milošević had tendered his resignation.

"If Milošević leaves the government, he and the SDSS will decide on his return to parliament", Pupovac said. "It's up to us to maintain the stability of this coalition, regardless of what that means for us and Deputy Prime Minister Milošević."

For more, check out our dedicated politics section.

ZAGREB, 30 March 2022 - Lawmakers on Wednesday welcomed a ban on the use of pesticides that are hazardous to bees during spring blossoming to avoid a repeat of the situation of June 2020 when millions of bees in Međimurje died.

"It turned out that that resulted partially due to the incorrect use of pesticides", state secretary in the Ministry of Agriculture Tugomir Majdak said during a debate in the Sabor on a bill on the sustainable use of pesticides. 

He added that beekeepers were compensated for the loss without noting the amount involved.

Majdak explained that anyone using products for protection during agricultural activities has to report what they are using to the Croatian Beekeepers Association or its local representatives.

Lawmakers pointed out that some pesticides were fake, while others warned of the problem of imported fruit and vegetables treated with banned pesticides.

Majdak: Croatia has more than 100,000 hectares with organically-grown products

Majdak explained that in Croatia more than 100,000 hectares, or 10% of total land registered in the Arcod System, is planted with organically-grown products and the aim is to increase that even further.

He added that Croatia is in the process of adopting an action plan for organically-grown products and that the use of sustainable pesticides and organic production is "our practice."

In light of the concern expressed by MPs given the negative effects of Russia's aggression on Ukraine and its impact on the food market as well as the drought, which could cause the need for additional pesticides to be used, Majdak said that the situation with crops is good and that a certain quantity of precipitation is expected, so there is no need for any additional effort regarding the protection of plants.

He confirmed that aerial spraying is banned while online sales of pesticides are not currently regulated by law.

For more, make sure to check out our lifestyle section.

ZAGREB, 30 March 2022 - Croatian Agriculture Minister Marija Vučković met with Albanian Ambassador Riza Poda on Wednesday to discuss common trade issues and ways of expanding bilateral cooperation in agriculture, the Agriculture Ministry said in a statement.

It was agreed that Vučković would soon visit Albania as part of efforts by both countries to expand bilateral cooperation in agriculture, and further strengthen trade.

The two countries have excellent relations and work together to achieve their common interests through mutual political and technical support.

The Croatian Paying Agency for Agriculture, Fisheries and Rural Development and the Albanian Agency for Rural Development have already signed a cooperation agreement, and next week the Croatian Agency is organising a workshop on improving the quality of internal audits for a delegation from the Albanian Agency.

In 2020, the two countries' agriculture ministries agreed veterinary conditions for exports of egg products and designed a veterinary certificate, given the considerable potential of the Albanian market for exports of animal products from Croatia.

Croatia has a surplus in trade in agricultural and food products with Albania and a high coverage of imports by exports of as much as 974%, the ministry said.

Albania is a considerable export market for small pelagic fish from Croatia, notably anchovy.

For more, check out our dedicated politics section.

ZAGREB, 30 March 2022 - Suad Arnautović was selected as the new president of Bosnia and Herzegovina's (BiH) Central Electoral Commission (SIP) on Wednesday, and said SIP is preparing for elections to be held in October despite the fact that an agreement on changing the election law has not been reached yet. 

Arnautović succeeds Željko Bakalar and was selected with the support of six SIP members as part of the regular rotation for that position. SIP comprises two Croats, two Bosniaks, two Serbs and one member from an ethnic minority.

Leading Bosniak and Croat political parties have not yet agreed on amendments to the election law which should incorporate rulings by the European Court of Human Rights and BiH's Constitutional Court, which have determined that the current law is discriminatory. Arnautović confirmed that SIP is preparing for the autumn elections because that is an obligation based on valid legislative provisions.

"We have been appointed to implement the election law...and it precisely regulates deadlines and one of our first obligations is to call elections this year," Arnautović said.

The current election law in BiH foresees general elections on the first Sunday in October every four years.

SIP is obliged to call the elections no later than 150 days prior to their holding, which means that that has to be done by 4 May.

Croat political parties gathered around the Croatian National Council have not denied the possibility of boycotting the elections if an agreement on amendments to the election law is not reached. Although there is still time for that, any agreement reached would have to be supported in the parliament with relevant amendments to the law and the Constitution too.

SIP is also faced with another problem. The Council of Ministers has not yet adopted any decision regarding financing the election because the 2022 state budget has not yet been adopted.

Representatives of the international community in BiH, including the EU, USA and OSCE as well as the Office of the High Representative, strongly support the October elections and have called on the authorities to ensure the necessary funds while appealing to Croat parties to consider whether boycotting the elections would be worthwhile because in that case, they would lose any chance of participating in government.

For more, check out our dedicated politics section.

ZAGREB, 30 March 2022 - Croatia's industrial sales in January 2022 increased by 15.7% compared with January 2021 and by 5.5% when compared with December 2021, according to data from the Croatian Bureau of Statistics (DZS).

Compared with January 2021, industrial sales increased by 11.6% on the domestic market, and 24.5% on the foreign market.

Broken down by main industrial groupings, sales of energy rose by 51.2%, sales of intermediate goods by 21.2%, sales of capital goods by 14.1%, sales of non-durable consumer goods by 11.5%, and sales of durable consumer goods by 7.0%.

Industrial sales had been on the rise throughout 2021, with the exception of February when they declined by 7.7% year on year. The lowest increase of 1.7% was recorded in January, while two-digit increases have been observed since March. The largest increase of 40.6% was reported in April.   

Compared with December 2021, industrial sales rose by 5.5%, going up by 1.7% on the domestic market and 2.2% on the foreign market.

Month on month, sales of energy increased by 67.8%, sales of non-durable consumer goods by 6.6% and sales of capital goods by 1.9%, while sales of durable consumer goods fell by 15.3% and sales of intermediate goods by 9.5%.

For more, make sure to check out our business section.

ZAGREB, 30 March 2022 - The Croatian Financial Services Supervisory Agency (HANFA) has granted permission to the Japanese Toyota Tsusho Corporation to enter the leasing market in Croatia, HANFA reported on Wednesday.

The Japanese Toyota Tsusho Corporation has been granted permission to establish a leasing company that will operate as Toyota Tsusho Leasing Croatia d.o.o. and to acquire a qualified share of 100% of equity in Toyota Tsusho Leasing Croatia d.o.o.

This is the first time a Japanese group has entered the leasing market in Croatia, HANFA said in a press release.

HANFA also reported that N3 Capital Partners has been given approval to establish and operate a small company for the management of alternative investment funds, which will be the first of its kind and will be established under the amended Alternative Investment Funds Act.

Currently, there are 35 alternative investment funds operating in Croatia and another four are in the process of being established. The net assets of the active alternative investment funds amount to nearly HRK 5 billion, HANFA said.

For more, make sure to check out our business section.