As Poslovni Dnevnik/Marija Crnjak writes on the 14th of September, 2020, following the coronavirus-dominated 2020 tourist season, which ended better than expected for all but travel agencies, along with measures to preserve jobs and liquidity, it will be crucial to enable the implementation of the Tourist Land Act, and complete investments stopped or slowed by the pandemic. Representatives of all segments of tourism agreed with that, and they were gathered by the Minister of Tourism and Sport, Nikolina Brnjac, at a joint press conference on Friday.

By the end of August in Croatia, when taking into account all accommodation facilities plus nautical tourism, 6.8 million arrivals and 47.6 million overnight stays were realised, ie 41 percent of the arrivals and 53 percent of the overnight stays realised in the same period in 2019. Of that, foreign tourists realised 5.5 million arrivals and 38.3 million overnight stays, while domestic tourists realised 1.3 million arrivals and 9.2 million overnight stays.

The results of the enfeebled 2020 tourist season exceeded the initial predictions of the World Tourism Organisation (UNWTO), which believed that Croatia would manage to generate only 30 percent of last year's tourism turnover during this highly unusual 2020 tourist season.

"Before us lies the realisation of the rest of the tourist year and preparations for next year, drafting a new strategic document for tourism development and a series of activities aimed at maintaining the stability of the tourism system, strengthening its resilience and speeding up the recovery process, European Union funds also have a role to play,'' stated Brnjac.

In terms of the percentage of overnight stays realised when compared to last year, the best traffic this summer was recorded in the nautical sector (70 percent), family accommodation (66 percent), but this wasn't the case along the entire coast, camps (57 percent) and finally hotels (44 percent). Weekenders made up only 3 percent less traffic than last year, and in some destinations like Vir they made up the vast majority of guests. This summer, hoteliers were under the pressure of cutting prices, which is why their income was 5 to 15 percent lower than the physical indicators, according to a survey by the Croatian Tourism Association presented by the association's director Veljko Ostojic.

"Camps had better demand, they realised 57 percent of last year's overnight stays. In addition, 4 and 5 star hotels were better filled by about 10 percent, and 5 star campsites had the best occupancy. This is a good indicator for the future development of tourism,'' said Ostojic of the 2020 tourist season. For next season, he considers it important to adopt a national safety label, which will be just as important as now.

Sean Lisjak, president of the Nautical Sector Association at the Croatian Chamber of Commerce, revealed that marinas accounted for 85 percent of last year's turnover this year, but will lose 150 million euros in September and October due to border closures. The annual revenue of the nautical charter last year was around 770 million euros.

The director of the Croatian Tourist Board, Kristjan Stanicic, pointed out that the CNTB's revenue this year will stand at around 200 million kuna, ie 150 million kuna less than last year, but he pointed out that it will be enough for the campaigns that are being prepared for 2021.

"The final preparations for the promotion of the post-season are underway, during which we're going to focus on the nautical offer, the continental offer, eno-gastronomy and the offer of Croatian national parks and nature parks. Throughout September, we'll conduct campaigns on our most important markets, as part of which we plan to thank all tourists for their trust when choosing Croatian destinations.

We're also working intensively on preparations for 2021, in which we'll position Croatia even more strongly as a safe tourist destination with a focus on markets that have responded best to promotional activities this year, such as Germany, Slovenia, Austria, Poland, Czech Republic, Italy, Slovakia and Hungary,'' said Stanicic.

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There will be no new economic closures because the domestic economy couldn't survive another ‘lockdown’, and funds and positive expectations that will not reduce consumption could play a key role in getting out of the crisis faster, these were some of the key messages expressed by Croatian exporters at a recent convention held in Zagreb.

As Poslovni Dnevnik/Ana Blaskovic writes on the 12th of September, 2020, half a year after the outbreak of the coronavirus pandemic, Croatian exporters, policy makers and experts are becoming cautiously more optimistic about the future of the domestic economy, believing that the worst is over and that there will be no new economic closures, and that stronger growth rates await us in 2021.

the impact of the coronavirus crisis was a topic of discussion at the 15th Convention of Croatian Exporters in Zagreb. Initially pessimistic about the scale of the coronavirus crisis, Marijana Ivanov, a professor at the Faculty of Economics in Zagreb, is more optimistic today.

''I don’t think we'll return to pre-coronavirus levels quickly and easily even though I'm not as pessimistic as before. The pandemic will leave profound effects globally. I believe that recovery will take the form of the letter K: some activities will recover faster, and others will be followed by a decline,'' said Professor Ivanov. She added that it is fortunate that the decline in exports of goods wasn't that strong, but she warned that, like everything else, the figures should be taken with a grain of salt, noting that the recovery in August no longer has the same dynamics as before, and we're now entering an uncertain autumn. She believes that the economy cannot survive another ‘lockdown’ and that consideration should be given to redefining self-isolation measures, the costs of which are borne by people and businesses who are already all experiencing lower incomes for the most part.

Let's unburden the economy

The first spring wave of the coronavirus was successfully thwarted at Solin's AD Plastika, a company that was awarded the Golden Key for the best large exporter back in a much more stable 2019.

The company, which employs 3,000 people and generates about a billion kuna in annual revenue, is working at full capacity again after the lockdown, fulfilling its obligations, and speaking about the future, the company's leader Marinko Dosen pointed out that there are no plans for possible cuts. He bases his optimism on the fact that everything they do is in line with deadlines and contracts. When asked what they need from the state as a company, Dosen didn't hesitate too much: “We need to work on the burden placed upon us. Today we have a negative spiral of an expensive state and a small base that fills the budget. The state has reacted fantastically this year, selective measures are still needed for help,'' he stated.

The President of Croatian Exporters, Darinko Bago, praised the government's measures for preserving jobs, assessing them as timely and well-designed, and gave an excellent assessment of the central bank's measures for preserving financial stability.

''I'm optimistic about the pandemic, we'll dance with the epidemic like a bear until the vaccine comes, then it will become our past, but it's important that people who make investment decisions are aware of the "fragility" of the situation and will work on things so such incidents no longer affect the world,'' said Bago. He sees a role in getting out of the crisis faster in venture capital funds, which are lacking in Croatia because banks are afraid of losses in uncertain circumstances. ''We have to develop funds if we want to be a country that wants to get out of this crisis, there are pension funds that have to act in this situation,” Bago noted, highlighting an example of the importance of institutional investors in the US.

Speaking of expectations, central bank governor Boris Vujcic said he is neither pessimistic nor optimistic. "I'm a realist. I think what I state based on the numbers is the best possible assessment of the real situation. Lately they have started calling me an optimist, probably because the atmosphere has been created to lead people to believe that things will be much worse, but I don't believe that. We see a strong recovery in industrial production and construction, with a sharp decline in services, but that decline is smaller than we expected in the spring,'' said Governor Vujcic, expecting 6 percent GDP growth next year, reaching the level of economic activity in 2015 after that.

Optimism, but also caution...

The Croatian National Bank's main man also attended the 15th Convention of Croatian Exporters and pointed out that banks in the current crisis (unlike the one which struck back in 2009) aren't the cause of the problem but are instead part of the solution, emphasising with satisfaction their good capitalisation and liquidity.

"Banks have secured moratoriums in line with the regulatory changes we've made possible, but they can't be asked to lend if they estimate they won't be able to collect the loan," Vujcic warned.

''There are countless examples in the world where negative forecasting has perpetuated negative activities. We also had "geniuses" here who said that everything is awful and that 400,000 unemployed people are waiting for us this autumn. Things should be positive, but realistically positive about the future, although there must be objective criticism. We have 22 billion euros at our disposal from the EU in the next seven years, we must see it from that perspective,'' stressed the Minister of Economy and Sustainable Development Tomislav Coric.

"In the coming period, Croatia needs to take a somewhat more liberal view of production by banks. With the support of institutions such as HBOR and HAMAG-BICRO, we can increase the capacity and increase the competitiveness of Croatian companies,'' added Coric Such thinking is shared by his colleague from the Faculty of Economics, who is also a political opponent, SDP economic strategist Josip Tica.

''The key thing is to enable the formation of expectations. "If people's expected income decreases, then they reduce their consumption, and that shock moves through the entire economy through the postponement of consumption and investment, which reduces GDP," explained Tica.

In the conditions of record high liquidity in banks, he believes that what is missing for the successful transfer of money into the real economy are partial guarantee schemes.

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ZAGREB, Sept 8, 2020 - Plastic car parts manufacturer AD Plastik wins Golden Key Award as the best large exporter in 2019, IT firm Infobip is the best medium-sized exporter and Jadran-una has been honored as the best small company, it was announced at the 15th Croatian Exporters Convention on Tuesday.

Addressing the convention, Prime Minister Andrej Plenkovic congratulated the exporters, saying that commodity exports had been rising steadily for the past 10 years and their share in GDP had increased from 16.7% to 28.5%.

He said that only 15% of Croatian companies generated revenues on foreign markets, while they employed 51% of the active workforce. He added that these companies place over 60% of their investments in research and development, generating three-quarters of total profits and nearly four-fifths of total investment in research and development in Croatia.

Speaking of boosting the export-oriented industry, Plenkovic cited reindustrialization and strong support to enterprises in using smart and clean technologies, greater use of energy from renewable sources, and digital transformation.   

"That is the path to increasing competitiveness," the prime minister said, adding that the government's focus would be on developing sectors with great growth potential such as information and communication technologies, pharmaceuticals, biotechnology, pure technologies, such as solar and hydrogen, and new technologies, including 3D printing, nanotechnology, and robotics.

He also pledged further investment in education, railways, and broadband internet infrastructure.

"Our ambition is to create 100,000 jobs over the next four years, that is before the end of our term," Plenkovic said.

He highlighted two objectives of importance for exporters - the adoption of the euro and entry into the Schengen area.

The backbone of the Croatian economy

The head of the Croatian Exporters Association, Darinko Bago, praised the government for how it was handling the crisis caused by the global coronavirus pandemic, citing the government's social sensitivity and efforts to preserve jobs and help the tourist industry.

"Exporters are the best that Croatia has, they are the backbone of the Croatian economy," Bago said, adding that exporters expected the government to continue to be socially sensitive, but also to intensify localization and regionalization.

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As Jozo Vrdoljak/Novac writes on the 7th of September, 2020, the Split County Chamber of the Croatian Chamber of Commerce (HGK) analysed the operations of the economy in Split-Dalmatia County during August and the first eight months of this year by looking at the value of fiscalised receipts and the unemployment rate.

According to the Tax Administration of the Split Regional Office, the value of fiscalised receipts from taxpayers based in Split-Dalmatia County over August amounted to 2.1 billion kuna, which is an encouraging 15.6 percent higher than it was in July, but 21.6 percent lower when compared to last August, which is obviously to be expected given the current pandemic-dominated situation.

In the first eight months of this year, receipts totalling 9.7 billion kuna were issued, which is a decrease of 19.5 percent when compared to 12.1 billion kuna recorded in the same period last year. The value of the receipts issued last month accounted for 21.6 percent of the value of all receipts issued for the entire eight-month period of this year.

The only activity in Split-Dalmatia county in the period from January to August this year to have achieved an increase in the monetary amount on issued receipts when compared to the same period back in 2019, was the activity of information and communication, with growth marked at 5.8 percent. The activities in Split-Dalmatia which recorded the largest decline in the monetary value of issued receipts, (of more than 50 percent) when compared to August 2019, are the arts, entertainment and recreation, which are down by a concerning 57.5 percent, construction 54.4 percent, transport and storage -52.9 percent and administrative and support service activities, which are down by 50.5 percent.

These are also the activities that, in addition to real estate/property, experienced the largest decline in the value of receipts issued in the first eight months of this year in Split-Dalmatia when compared to the same period last year.

Considering the representation of accommodation and food preparation and serving in the central Dalmatian county's economy, it should be emphasised that the value of the receipts issued in that activity last month amounted to 606.4 million kuna, equal to 30.7 percent less than what was recorded back in August last year.

"Despite the current epidemiological situation, when we look at the activity of providing accommodation and food preparation and serving in Split-Dalmatia in August when compared to July, the value of fiscalised bills increased by 37.8 percent," stated the president of HGK's Split County Chamber, Joze Tomas.

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As Poslovni Dnevnik writes on the 5th of September, 2020, a proposal for an amendment to the Ordinance on the exemption from paying tourist tax for individuals providing hospitality services in a household or on a family farm has now been sent to e-counselling/e-savjetovanje. Just who can apply for this new Croatian coronavirus measure?

Taking into account the special circumstances caused by the ongoing coronavirus pandemic that have negatively affected the work of private renters and family farms (OPGs), the Ministry of Tourism and Sport sent an e-consultation recently to propose an amendment to the Ordinance on the exemption from paying tourist tax.

"Tourism is extremely important for the entire economy of the Republic of Croatia. From the very beginning of the crisis caused by the coronavirus pandemic, the Government of the Republic of Croatia has adopted measures to enable the preservation of jobs and the liquidity of the economy. The measures presented by the Prime Minister at the session held on September the 3rd, 2020, provided the most important preconditions for the continuation of healthy tourism in the uncertain days and months ahead of us. Bearing in mind the specific role of private accommodation in the Croatian tourist offer, we want to help the most vulnerable private renters and family farms with the measures in the amended Ordinance, and we believe that this proposal will enable the better and more successful preparation of the entire sector for tourism in 2021,'' said Nikolina Brnjac.

The amended ordinance, which is in essence a new coronavirus measure would completely exempt renters who, owing to the previous decision on the termination of the provision of hospitality services, and those who did not have any registered overnight stays in 2020, from the payment of tourist tax. The same ordinance will exempt a person from the area of ​​the City of Zagreb, Zagreb County and Krapina-Zagorje County from paying the tourist tax for those capacities located in buildings that were damaged in the earthquake and were marked unusable (with a red mark) or temporarily unusable (with a yellow mark).

"Given the extremely challenging year during which there was a significant decline in tourism activity as a result of the coronavirus pandemic, this regulation seeks to further mitigate the negative consequences for those renters who failed to realise tourist traffic and decided to deregister their capacities, and who would, otherwise, in accordance with the regulations in force from 2020, have been required to pay a lump sum. This ordinance will significantly help in the further implementation of the competent legal norms that regulate the payment of tourist tax,'' said the director of the Main Office of the Croatian Tourist Board, Kristjan Stanicic.

In order to avoid the collection of tourist tax from persons who will be exempted as a result of the the amended ordinance and reduce the administrative burden to the system, for taxpayers who aren't exempt from payment, the deadline for the payment of the remaining debt has been moved to the 30th of September 2020.

For taxpayers who don't meet the criteria for this new coronavirus measure which regards the full exemption from having to pay tourist tax, there are no legal obstacles to the payment of the tourist tax.

It's worth mentioning that since the outbreak of the ongoing pandemic, the Ministry of Tourism and Sport has also adopted an ordinance on the deferral or total exemption from the payment of tourist tax for persons providing hospitality services in households or on a family farm (OPG).

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As Novac/Goran Penic/Marina Klepo writes on the 29th of August, 2020, the worst coronavirus-dominated economic forecasts have unfortunately come true: Croatia's GDP sank 15.1 percent in the second quarter, and among EU countries, according to the data released so far, Croatia recorded the fifth worst result, after Spain, France, Italy and Portugal. The Croatian Government has some tricks up its sleeve.

Historically, Croatia has never seen such a sharp decline in its economy, and CBS data from 1996 shows that the biggest quarterly decline so far was at the beginning of 2009, at the outbreak of the financial crisis, which stood at 8.8 percent. The lockdown to curb the spread of the new coronavirus has resulted in a much worse drop.

Due to the absence of the pre-season, CBS data shows that export of services fell by as much as 67.4 percent. The export of goods, meanwhile, fell 10.4 percent, household consumption fell by 14 percent and investment fell by 14.7 percent. The fact that household consumption was reduced during quarantine doesn't come as a surprise, but investments have sunk more than expected. Of the total investments in the country, as was explained by the Minister of Finance, Zdravko Maric, 52 percent refers to construction, and it recorded a slight plus.

Big challenges lie ahead according to Zdravko Maric...

''We believe that the procurement of equipment led to the fact that total investments fell more than expected. We also had a physical barrier regarding the procurement of equipment due to the pandemic,'' said Maric, saying at the same time that "challenges lie ahead". Of all the components of GDP, the only exception in terms of the drop is government spending, which increased by 0.7 percent.

Goran Saravanja, the director of the Imelum consulting company, pointed out that the worst is over, although the recovery will be long and uncertain, and he expects GDP decline this year to be less than 10 percent "due to a better tourist season than what was expected". But he doesn't expect a more pronounced recovery in terms of personal consumption. Zrinka Zivkovic-Matijevic, an RBA analyst, has more pessimistic expectations, believing that the latest announcement confirms that the fall in GDP will be above 10 percent this year, and growth of only three percent can be expected next year.

If we want to mitigate the economic downturn and prevent significant layoffs, the finance minister said, the government faces major challenges. Although it launched a very generous job preservation package in the spring, there is a real danger that many will find themselves in a thankless situation after the measures expire. When asked what he thinks the government could or should do to prevent the worst-case scenario, Zivkovic-Matijevic singles out "working on strengthening the institutional capacity to withdraw the planned European Union funds'' as something of significance.

The first payments of the agreed 22 billion euros from the EU are expected this autumn, and that money should mitigate the consequences of the coronavirus crisis, accelerate domestic economic growth and make things a bit more sustainable. But to what extent Croatia will be able to offer quality programmes in order to make really good use of the large amount is still something which is yet to be seen.

According to Saravanja, the Croatian Government would mitigate the decline in domestic demand the most if it could accelerate the start of infrastructure projects, ie capital investments that are in a high stage of preparation, especially projects with an EU financial component. He adds that those in charge should absolutely not lose focus on structural reforms.

The third quarter

Croatia's GDP, when viewed over the first turbulent six months of 2020, fell by 7.8 percent, which is actually slightly better than the EU average where the decline stood at 8.3 percent. Owing to the fact that Croatia had a slightly better first quarter, and since Croatia recorded 53 percent of overnight stays in tourism compared to last year until this August, and planned for a massive 70 percent decline, the Government expects that in the third quarter, the predicted decline will be slightly lower, and ultimately at the end of the year - GDP decline will be slightly less than planned.

''Even under the theoretical assumption that by the end of the year we have no more tourists, overnight stays will be at over 40 percent of what was recorded last year, which will reflect GDP trends and a correction of the fall in the third quarter and by the end of the year,'' said the Prime Minister's Adviser for Economic Affairs, Zvonimir Savic. When it comes to further measures to mitigate the consequences of the ongoing coronavirus crisis, the Croatian Government is counting on generous funds from the EU for liquidity of the economy, the preservation of jobs, as well as for reforms and investments.

A few days ago, we received confirmation that we will have one billion euros of soft loans from the SURE programme at our disposal, with which the government will compensate the current cost for co-financing salaries during the lockdown, but also for further measures. According to Savic, the measures will be targeted towards activities that are the most affected by the coronavirus crisis, in the sectors of tourism, catering and transport. This money will then be used to finance the measure of a shortened working week and other things. The tourism sector is demanding that the measures last until the beginning of next season.

The second thing that is planned, according to Savic, is to maintain the liquidity of the real sector through favourable loans from HAMAG BICRO and HBOR for small and medium-sized enterprises.

''The concept of the Covid loan goes further with a grace period, five years of repayment and an interest rate of 0.25 percent. It is estimated that this year alone, we'll have 100 to 200 million euros, and in two years a total of 700 to 800 million euros,'' added Savic.

The most significant funds lie in the mechanism for recovery and resilience of the economy - over 6 billion euros that can be used over the next three years. EU countries must draw up national recovery plans in the next three months, and through this mechanism, all reforms and investments related to strengthening the economy in the pandemic can be financed. These are projects for environmental protection, infrastructure, digitalisation and the reform of public administration, the judiciary, and as has since been found out, Croatia has negotiated that the funds be used for the reconstruction and construction of school buildings after the Zagreb earthquake, and the same is being negotiated for health and cultural facilities.

Wage growth

''These are non-refundable funds with which we can renovate public buildings, and this is then an opportunity for the construction sector, but also for companies that will equip schools and hospitals. We can also justify the costs of distance education,'' said Savic, noting that the programme has been in force since back in February. There is also a tax relief that will come into force next year, and which, through a reduction in income and profit taxes, will bring citizens higher salaries and business owners higher incomes, which should encourage more consumption.

The Croatian Government is also counting on negotiations with the unions about the agreed increase in salaries in the public and state sector. As we have learned, the dynamics of wage growth will be negotiated with regard to the situation. There will be either a delay for a while (for two years, for example) or a slowdown in growth (minor increases) on the table. The government wants a compromise, it doesn't want to cause friction, and it hopes that the unions are on the same wavelength as them in terms of awareness of the velocity of the coronavirus crisis we're all trying to wade through together.

It wants to speed up investments as well. At the moment, over 20 billion kuna are involved in various projects financed from the EU, and state-owned companies are expected to invest more.

Urgent moves by the Croatian Government to get out of the coronavirus crisis are as follows:

1. A shortened working week

The government will help activities in tourism, catering and hospitality and transport with co-financing of 2000 kuna per worker for a shortened working week. The criteria and duration of this measure are still being agreed on.

2. Favourable loans for business owners

HAMAG BICRO and HBOR will continue to provide loans with interest rates of 0.25 percent to maintain the company's liquidity.

3. The construction of schools and hospitals in Zagreb

Croatia has 6 billion euros of grants at its disposal that can be used for various projects which involve environmental protection, infrastructure, digitalisation and the reform of public administration, the judiciary and so on. The funds will be used for the reconstruction and equipping of schools, as well as health and cultural facilities after the Zagreb earthquake, which will boost the construction sector.

4. Tax relief

A new tax reform will take effect on January the 1st, 2021, reducing income tax rates from 24 to 20 percent and from 36 to 30 percent, as well as income tax from 12 to 10 percent for small and medium-sized enterprises. Salaries should thus increase by 100 to 800 kuna. The Croatian Government once again wants to encourage consumption.

5. Negotiations with trade unions on the increase of salaries

The Croatian Government wants a compromise to either freeze the agreed wage increase until GDP starts to rise, or to make the increases smaller than agreed.

6. Investments

It wants to accelerate investments financed from EU funds, as well as payments from the EU budget, and encourage state-owned companies to have more investments.

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As Novac writes on the 23rd of August, 2020, the Voice of Entrepreneurs Association (Glas Udruga Poduzetnika) recently issued the warning that the subsidies for preserving jobs for businesses, issued as a welcome move by the Croatian Government as a packet of economic measures, haven't been paid for as many as two thirds of Croatian companies for July, and for some didn't even receive payments for June.

"In the survey we conducted among our members, as many as 76 percent of them pointed out that they haven't yet received government support for July, while 8 percent of them haven't even received support for June. We're really talking about a large percentage here, and what's even more worrying is the fact that there are funds for it! Namely, Finance Minister Zdravko Maric says as much in the media, but the money obviously isn't reaching the addresses of the users. The Minister is just transfering inquiries into the matter to the Croatian Employment Service (CES),'' stated the aforementioned association.

They also pointed out that the director of the CES states in the media that the grants for June will be paid out as of August the 20th, and so he doesn't see the problem of it being a month late. He explains this by saying that CES employees had to coordinate their vacations themselves.

"It's inadmissible, obviously due to annual leave, to leave the beneficiaries of measures without any funds for the payment of salaries. In this crisis situation, the CES must adjust its resources and the way it works. In this way, an additional gap is created between the public and private sectors, because while some are on paid vacations, others have absolutely nothing,'' they stated.

The association also warned that Croatian companies and other business entitites, who have sent inquiries and complaints to the CES, have been waiting for an answer for more than a month now.

"At a time when they need information more than ever, they can't get it. There are, of course, exceptions, but it seems that the organisation within the CES itself has failed. Recently, on behalf of our members, we sent an inquiry on this topic to the Ministry of Labour. We're waiting for an answer,'' it states in the association's announcement.

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As Poslovni Dnevnik writes on the 21st of August, 2020, Finance Minister Zdravko Maric was a guest of Dnevnik Nova TV on which he revealed where the Croatian Government is planning cuts in order to "patch" the budget back up again, that is, which categories it will not touch.

At the beginning, the Minister of Finance, Zdravko Maric, commented on the deficit in the state treasury of 17 billion kuna when compared to last year and said that the deficit due to the coronavirus crisis is actually even bigger.

“This is a mid-year result that applies to both the period before the arrival of the coronavirus pandemic and after the fact. We'll try to see how much coronavirus is actually going to cost us. On the one hand, we have a decline in revenues, both due to the decline in economic activity and due to the anti-epidemic measures, delays and the write-offs of taxes, but increased needs on the expenditure side of the budget. We paid only six billion kuna in job preservation support. When some other measures are added to that, we're at almost 12 billion kuna, and then when we add it all up, we come to 21 billion kuna, and that's at the moment,'' explained Minister Maric, pointing out that cuts are being considered, and only pensions will be safe from them.

"Pensions will certainly not be touched, all other things are subject to our considerations," he said. He said that the government is fully aware of the situation with the crisis, but pointed out that in the past four years they have proved that they will return public finances to balance as soon as possible.

"Reforms are one of the two key levers for using funds from the European Investment Recovery Fund," he said, but Zdravko Maric was reluctant to talk about concrete cuts and reforms and avoided those issues several times.

Although it isn't possible to accurately estimate the upcoming economic downturn, he pointed out that a decline of over twenty billion kuna is unfortunately predicted. The minister also explained that part of the reason for this was the decline in fiscalisation, which declined by more than 35 percent back in April this year.

"It will be the biggest drop for sure, at least since GDP has been being monitored. We didn't have such statistics to go off back during the Homeland War, but this will certainly be the biggest drop,'' claimed Zdravko Maric.

He announced that the government is starting to reduce income tax from 36 down to 30, and from 24 down to 20 percent, and the profit tax for all those who achieved less than seven and a half million kuna in turnover will be reduced from 12 to 10 percent. As for employees, he acknowledged that the new measures wouldn't affect the salaries of those not covered by the reduction, so he appealed to employers when it comes to salary increases.

"De facto, today you can pay an additional thousand kuna a month to a worker, or even more, without needing to pay any additional taxes. Even before the coronavirus crisis hit, one of the key issues was how we were going to be able to compensate for labour shortages and how we can stimulate employers to increase employee wages. We've already said that we can only get out of this crisis if we work at it all together, as a joint force,'' he said.

He estimated that we will return to how thinga were the year before the coronavirus hit, in terms of the Croatian economic picture, only a year later than expected, so in 2022.

"It's a complex issue in which one must always refrain from commenting. We have a consultant doing his job, the process is carrying on, and when all the parameters are clear and when he sits down at the table and sees what that price is, whether the buyer is willing to buy and the seller sells, then we'll have to see, but it's complex and it's difficult go into details,'' Maric explained when discissing the complicated issue of possibility of buying INA.

Still, he admitted that all this has been going on for a long time and that it must end once and for all at some point in time.

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The ongoing coronavirus pandemic has delivered a heavy blow to the Croatian economy, which relies an enormous amount on tourism, and the virus has taken a concerning amount of jobs across the country.

As Poslovni Dnevnik/Jadranka Dozan writes on the 14th of August, 2020, according to the Croatian Employment Service's records on the number of unemployed people recorded in the first two weeks of August, their number decreased by five hundred when compared to the end of July. Yesterday, there were 150,959 people registered as jobseekers, and last month ended with 151,433 registered unemployed persons. When compared to June, the number of registered unemployed increased by 782 persons in July, while compared to July last year, it increased by more than 37,000.

In parallel with the monthly increase in the number of unemployed people, however, employment measured by the number of insured persons at the Croatian Pension Insurance Institute also increased in July. When compared to the month before, there were 0.8 percent or 12.7 thousand more people, reaching a total of 1.55 million people. This was the third consecutive month of growth in the number of insured persons in Croatia, although the negative trend that began in April unfortunately continued in the year-on-year comparisons.

For months now, the real momentum of the negative consequences of the coronavirus pandemic on the Croatian labour market has been announced with apprehension, because, in addition to seasonal shock absorbers, most government subsidies will be fully expressed in the sense of needing to subsidise employee salaries. During July alone (for the payment of salaries for the month of June) these subsidies covered significantly fewer workers than they did back during the first wave; a total of 67,040 workers were paid, all of whom were working for a total of 16,200 employers, while a total of 577,000 workers were paid for the month of April.

Up to 300,000 unemployed people in Croatia as a result of the coronavirus pandemic?

How many jobs will prove vulnerable in a few months, under these conditions of considerable uncertainty about the development of the coronavirus crisis, can only be guessed through rough estimates. Drazen Orescanin, an entrepreneur who has recently been primarily exposed through his role of executive director of the Voice of Entrepreneurs (Glas Poduzetnika) Association, recently stated that with the end of the tourist season and the arrival of autumn and winter on its way, we can realistically expect "some 250 to 300 thousand unemployed people at the Croatian Employment Service". Anything beyond that, according to the aforementioned association, "would mean a very big crisis indeed."

In the analysis published over recent days, Hanfa estimated the consequences of the coronavirus crisis on the labour market at around 66,000 lost jobs across Croatia in the first half of the year. The number of unemployed people in the first six months was a little less, more specifically 19 thousand less, but the analysis states that in recent years, at that time of year, the number of unemployed decreased by an average of 48 thousand, so the effect should be attributed to this variable.

According to Hanfa's analysts, the rise in unemployment will hit the younger population the hardest, as the higher share of permanent contracts is among them, and seasonal workers, especially those working in the provision of services and in the tourism sector.

"In terms of the share of the total aid for job preservation, the processing industry and the trade sector are significantly endangered, as they rely heavily on cross-border trade, which has decreased,'' they emphasised. In most of the current economic forecasts, the unemployment rate in Croatia, after falling to seven percent last year, could rise to ten percent again this year. The speed and intensity of the return to lower single-digit rates will depend to a large extent on the availability of European economic recovery assistance programmes.

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Things have very much picked up in the economic sense when compared to the dire months of March and April, when the coronavirus pandemic got its claws into Croatia and lockdown saw the amount of issued bills drop by an enormous amount as spending took a downhill turn, but we're far from out of the woods yet. 

The tourist season might be faring better than we could have ever hoped back in spring when dire predictions for the travel and tourism sector across the world were published everywhere, but that doesn't mean that things are looking up financially as many of the traditional ''big spenders'' in Croatian tourism are struggling to get here as air travel remains interrupted for many.

As Novac/Gordana Grgas writes on the 12th of August, 2020, while the Croatian coast has been full of guests throughout August so far, data from the fiscalisation system shows an increase in consumption, but it also shows just much weaker it is than the comparable period last year due to the ongoing coronavirus crisis. In total, since the second part of February 2020, the number of issued bills has decreased by a discouraging 28 percent, and the monetary figure on those same bills has decreased by 19 percent.

In terms of Croatian tourism, more precisely in the activity of providing accommodation and food preparation and serving, in the same period, a much larger decrease in the number of issued bills is visible - 44 percent, and the monetary amount on those same bills has dropped by an extremely concerning 50 percent.

The first days of August, however, show that the tourist season is now very much in full swing. Namely, according to the latest data published on Monday by the Tax Administration, last week (from the 3rd to the 9th of August) compared to the same period back in 2019, a decrease in the number of bills issued of 21 percent and a decrease in the monetary amount of 15 percent are visible across all activities, and in tourism, a reduction in the number of bills of 26 percent was seen, with the monetary amount standing at the same number. Last week, 1.3 billion kuna was earned, and now 985 million kuna has been earned.

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