As Poslovni Dnevnik writes on the 23rd of April, 2020, the Croatian Employers' Association (HUP) welcomes the government's plan to relax the current anti-epidemic measures and allow for the opening of more extensive business activities, as this is an important step on the road to the country's economic recovery following the coronavirus pandemic, which is still being carefully monitored.

''Today's decision from the government provides a clear direction for the intensification of business activities and people's return to their jobs, which is a prerequisite for generating income and securing funds for workers' wages. Additionally, an important dimension is this psychological moment for all of us, in which we've been given a clear indication that the situation is getting better,'' they said in a statement.

"We urge employers to receive clear and unambiguous instructions on how to engage in their work safely, and as soon as possible. Precise instructions are needed for companies to be able to do whatever is necessary to operate in these new conditions, in accordance with the instructions of the epidemiologists. In this way, the conditions that guarantee the safety of employees, as well as of clients, customers and consumers, and the continuation of economic activity without the threat of fines and closures due to possible unclear interpretations, will be ensured quickly. We think that it's important for us, together with the government, to ensure that the measures that are being sought are applicable and practicable,'' said HUP's Davor Majetic.

HUP also urged the Croatian Government to draw up, as soon as possible, criteria according to which epidemiological indicators will allow for the re-opening of prohibited sectors. Based on this criteria, businesses will be able to monitor the situation and prepare for a possible re-start. In addition, when the government publishes such sector-specific guidance, business owners will be able to assess whether it is possible for them to operate profitably or sustainably at all under such conditions.

Autumn will more than likely be met with a large number of unemployed people across Croatia, we need urgent measures to address this.

With this anti-coronavirus measure relaxation phase, the strong focus of HUP's efforts are focused on measures to stimulate the economy again and launch a new economic cycle as Croatia now needs to create the preconditions and solutions for economic momentum in the coming year. Conservative estimates predict that by the end of the year, there will be 300,000 unemployed people in Croatia, so solutions to boost the economy are urgently required.

Here are nine essential prerequisites that HUP proposes to revitalise the domestic economy in the wake of the coronavirus pandemic:

The maintaining of company liquidity

The urgent analysis of all para-fiscal levies - reducing the fees for who pay the most, urgently, and for at least a fixed amount of time, and then permanently reducing and eliminating fees where it is possible when further analysis is carried out

The reorganisation of public administration and territorial organisation of the state

The digitisation of the state

A change to Croatia's labour legislation

Continued procurement and public investment processes

The strengthening of private sector investment and better cooperation between local entrepreneurs/businesses and local government units

The payment of VAT upon realisation

The issue of self-sufficiency to be taken as a national security issue, primarily in regard to food and medicine

The strategic development of the food and medicine industry in Croatia to achieve a higher level of self-sufficiency in general

As a result, HUP will continue to talk intensively with the Croatian Government in order to prepare everyone together to re-start the Croatian economy

For more on coronavirus in Croatia, follow our dedicated section.

In predicting the market scenario after the coronavirus pandemic, that is, changes in the system of globalisation as we've now known for so long, yet another opportunity for the Croatian furniture industry to make a huge leap forward in its development can be found.

As Poslovni Dnevnik/Juraj Loncaric writes on the 20th of April, 2020, the Croatian economy, as well as the manufacturing and construction industries are being forced to co-exist with the coronavirus pandemic for a longer period of time. Finding the optimal balance between health, economic and social priorities is the key to successfully managing in these trying times.

Strict restrictive measures in most EU countries and indeed across the world have more or less restricted production, which has a knock-on effect on sales and consumption. However, export-oriented wood processing and furniture production expect the EU's stringent restrictions to be eased, as many businesses in the field have temporarily or even permanently lost both foreign and domestic orders.

A modern, technologically and commercially organised, globally competitive European furniture industry (115,000 entities, with 1.1 million employees in total) purchases raw materials and supplies from around the world. Imports of these materials from the Far East have significantly increased over the last 30 years and the continuity of these deliveries has, owing to these unprecedented circumstances, been called into question.

The coronavirus crisis is forcing EU importers, wholesalers, retailers and furniture manufacturers to reconsider their own sources and supply chains, depending on market demand. The self-sufficiency of industrial production is one of the topics to dominate early 2020, and this could mark a major turning point for the international exchange of goods and services.

Reduced purchasing power has become the uncomfortable norm thanks to the pandemic.

The ''start date'' of the resumption of production activities and the gradual normalisation of furniture demand will certainly be very different across various EU countries. During the second half of April, a number of countries with advanced furniture and wood processing industries in the EU have been spending time considering a decision on dates for May, such as the mitigation of restrictive measures, and the resumption of production and the opening of specialised retail stores and other department stores. Production has been continuing in the Far East, most notably in China, which is well known as the world's largest exporter of furniture.

The good news is that wood processing and furniture production are on the list of many governments' priorities for the easing of anti-epidemic measures. The production of clothing and textiles is at the very forefront. The coronavirus pandemic has seen some extremely strategic management decisions be put at stake for the furniture and wood industries in both Croatia and the EU.

The purchasing and need for furniture, and therefore the demand for primary wood processing products, depends on the needs and desires of consumers and their purchasing power, and this has been further reduced. The question of when this trend might come to an end is still up in the air.

Industrial companies have been applying strict safety measures at work, and these are now being supplemented significantly to protect against the spread of the new coronavirus (COVID-19). In an environment threatened by something as menacing as a global pandemic, the preservation of personal health and common material interests is very much in the interests of both employers and employees.

Medium and small sized furniture factories are complex and changeable organisms, with numerous business relationships existing in the sales/export and supply/import chains. Any interruption of the production process in a single factory for several days causes a material and logistical damage. The interruption of industrial production in a country for several months causes a level of material and social damage that is difficult to measure, and the problems being experienced by many small and micro furniture manufacturers in this crisis are particularly complex.

For the Republic of Croatia, the coronavirus pandemic can be a challenge, but also presents with a golden opportunity to support the development of the manufacturing industry, whose share in GDP is low, more than ever before.

It is time for those who design Croatia's economic policy, as well as professional institutions and associations who also deal with that, to immediately prepare a debate and propose some decisions in regard to the national industrial strategy for the 2021-2027 period. The need to propose measures that will encourage exports, small and medium-sized manufacturing businesses, the use of information technology, and online sales, domestic consumption and more, are required now more than ever.

Croatian design is being sought.

The wood industry, furniture production and final wood processing are strategic activities for the Republic of Croatia. Compared to the business of its competitors from EU countries, the development of finalising valuable Croatian raw materials has not been sufficiently dynamic, nor has it been all that cost-effective.

In predicting the market scenario after the coronavirus pandemic subsides, or more precisely the structural changes in the globalisation system that are likely to come, lies another opportunity for the Croatian production of furniture to make a step forward in its general development.

The competitiveness of the Croatian timber industry has been confirmed by exports, which account for 60 percent of the total production value. It also accounts for 10 percent of total merchandise exports, and 90 percent of those raw materials and parts are of Croatian origin. Domestic raw materials will become more competitive than ever before in the changed conditions of international trade, ie, limited globalisation, following the end of the pandemic. The quality of products and branches of Croatian industry is very well recognised on the international market, and Croatian furniture design is a sought-after and very much desired product.

Make sure to follow Made in Croatia for more on Croatian companies, products and services. Follow our dedicated section for all you need to know about coronavirus in relation to Croatia.

As Poslovni Dnevnik writes on the 21st of April, 2020, Croatian National Bank Governor Boris Vujcic spoke on Dnevnik N1 about moves the Croatian National Bank (CNB/HNB) is making in connection with the ongoing coronavirus crisis. He said that Croatia is currently in an unusual situation, as is the case when part of the economy needs to be shut down.

"Estimates which are now being made roughly estimate that one month of shutting down the economy brings us a three-point drop in GDP. According to the IMF, the GDP drop 3 percent every month,'' Boris Vujcic said, adding that at the moment, the need to finance the budget is adding up to about ten billion kuna a month.

''We're doing a scenario model where we go with three scenarios - optimistic, pessimistic and basic. They're based on the assumptions of how long the economy can function in this restrictive model. The longer that time goes on, the longer Croatia's GDP falls. We don't know how long it will take, so we can't do a single projection. The depth of the recession this year will depend on whether it's six, nine or twelve weeks of the economy having to work in quarantine.

We expect strong economic recovery in 2021, but not one that would allow for the economy to reach the GDP level of 2019 by the time 2022 rolls around. In an optimistic scenario, we can expect to reach that level of GDP at the end of the projection horizon,'' Boris Vujcic said.

Finance Minister Zdravko Maric said Croatia needed between 60 and 75 billion kuna for three months' worth of assistance packages.

''The need for financing can be done partly on the domestic financial market, by banks and other financial participants, the other way of financing is funds and the third part can be done on the foreign market.

The CNB has done several things. At the beginning of the crisis, it ensured the stability of the exchange rate through foreign exchange interventions on the market. The second part of these actions was to provide additional liquidity on the market, and the third part was related to securities, with which we stabilised the Croatian state's bond market.

We're ready to defend that [same] course. The CNB kept the kuna exchange rate stable and will continue to do so until the introduction of the euro happens. Now is the opportunity to see how important it is to have large international reserves,'' the Governor explained.

If Croatia had introduced the euro today, we would have been in a more favourable position, Vujcic added.

"If we were in the Eurozone, we wouldn't have had an issue with maintaining the exchange rate stability, we'd have the monetary policy of the European Central Bank, which prints one of the two major world currencies. We'd have the resources of the European Stability Mechanism, in addition to that of the ECB, where each Eurozone country can obtain two percent of its GDP, which would have meant another billion euros in our case,'' Boris Vujcic said.

"The CNB has changed, adjusting its regulatory framework for banks for a year, which allows banks to be able to allow customers to defer their payments of liabilities for a period of three months to a year. Not every client has the same commitment and not everyone will be equally affected. If a law were written on this issue, it would be difficult to enact it by determining who has a right and who has no right. Some need that for a short period of time, some need it for a long period of time, some don't need any time at all.

At the end of last week, out of 30,000 business owners who had taken out a loan, 9,000 requested a deferral of their obligations. About 30,000 people have asked for a delay in servicing their obligations,'' Boris Vujcic said.

Make sure to follow our dedicated section for more on coronavirus in relation to Croatia.

Could Italy's uncertain economic future be a blow to the Croatian economy? While things currently remain decent in terms of Italian liquidity, the way things will play out with the coronavirus pandemic are difficult to predict, and the Croatian economy is already being squeezed without the idea of a major trading partner and neighbour going under.

As Gojko Drljaca/Novac writes on the 20th of April, 2020, more and more analysts and investors are questioning the chances of the now truly enfeebled Italy simply going bankrupt. At the moment, there is no major threat to Italy's liquidity, as the European Central Bank's Pandemic Emergency Purchase programme is likely to refinance the country's needs this year.

However, even before the COVID-19 pandemic, Italy was fiscally poor. At the end of last year, its debt reached 136 percent of GDP. Given that according to IMF estimates, which appear to be somewhat optimistic, Italy's GDP will fall around 10 percent, this means that Italy's debt-to-GDP ratio could go up to a concerning 180 percent this year. This is a level of debt that is completely unsustainable for a country like Italy.

Italy can avoid entering into bankruptcy with extensive assistance from the EU or other international institutions, but given the size of the Italian economy and the growing fiscal problems of other European Union member states, it is not certain that the fiscal capacity will be sufficient to save Italy from a very undesirable fate.

There is a possible scenario under which the European Central Bank would buy up unlimited amounts of Italian debt, but it is also not certain that other member states, who are growing increasingly frustrated, would agree to such a monetary policy move, nor is it clear what the effects of such monetary policy would be on the Eurozone as a whole, and on European Union members as well, regardless of whether or not they have introduced the euro as their official currency.

At the EU level, there has been a debate on how to fund recovery. Ursula von der Leyen, Head of the European Commission, is preparing to propose the adoption of a new reconstructed Multinational Financial Framework (MFF) 2021-2027 to EU member states, which would include funding for the recovery from the ongoing COVID-19 pandemic.

Southern members, and France, would much rather see a special financial vehicle outside the financial framework as a proposal on the table. These financial ''vehicles'' should be loaded with huge amounts of funds by member states, and launched within just a few months. In either case, if the recovery is to be financed by the MFF- or another sort of special financial ''vehicle'', Italy might make it through this without the need for bankruptcy or radical debt restructuring if the northern EU countries agree to take on its refinancing. The very difficult question is whether the Germans and the Dutch can ''sell'' it to their taxpayers.

In this context, it should be noted that Italy is a major Croatian foreign trade partner and anything that goes so drastically wrong in Italy is certain to give the Croatian economy a very unwelcome hit of some level or another. A large number of Italian tourists come to Croatia. In the event of a worsening economic situation (bankruptcy or debt restructuring), the Croatian economy will also suffer a tremendous blow. The COVID-19 pandemic also brings very high-risk external sources for Croatia. There are, as yet, no estimates of the possible consequences of Italian bankruptcy on the Croatian economy, but it isn't something one likes to imagine.

It should be recalled that this weekend, the French president warned that in the event of financial solidarity with EU member states in the greatest distress, the survival of the EU and the Eurozone could be at stake.

Make sure to follow our business page for more on the Croatian economy.

April 18, 2020 - The restrictive measures currently in place because of the coronavirus pandemic will expire at midnight on Sunday. Prime Minister Andrej Plenkovic has thus asked Croatian ministers to prepare an overview of economic activities to restart the economy, after which epidemiologists will make recommendations on how to comply with the measures.

"Most epidemiological measures expire at midnight on Sunday, and we will certainly extend most of these measures. But we are definitely moving towards a phase where certain measures will come to an end," said Chief of the National Civil Protection Headquarters and Minister of the Interior, Davor Bozinovic, on Friday for Jutarnji List.

He reiterated that Prime Minister Andrej Plenkovic asked all Croatian ministers to prepare an overview of economic activities to restart the economy, after which epidemiologists would make recommendations on how to organize compliance.

Next week, therefore, the Government will discuss proposed measures to unlock the Croatian economy after restrictive measures to curb the coronavirus pandemic have been in place for almost a month.

The most anticipated relaxation measures are certainly those regarding tourism, especially given the pressure from some of our foreign markets, which would love to spend the summer in the Adriatic this year. In this regard, for the sake of domestic guests, it is proposed to open intercity traffic and then the borders towards our auto destinations, which, in the case of a good epidemiological picture, could have some visitors this year.

"It is important that the conditions of border crossings are as simple as possible because if people have to wait in traffic and fill in paperwork, this is not appropriate either in health or in tourist terms," said the Jutarnji List interlocutors. When it comes to accommodation, it is suggested to open those closest to nature - primarily campsites - and begin with a segment of mobile homes with their own toilets so that guests do not mix often, and holiday homes and private renters will be open.

There are high hopes in nautical tourism, more precisely, the charter segment, which should also come to life among the first, because it was concluded that it could provide epidemiological conditions. It is also suggested to open cafes and restaurants, but to begin, only those who have terraces and who can provide sufficient distance between tables and guests.

Regarding the transport sector, Minister Oleg Butkovic will propose the introduction of the Zadar - Ancona catamaran line for freight, the gradual introduction of public transport in cities on a Sunday timetable, and the suburban railway around Zagreb gradually opening up under the same rule. The ministry is likely to suggest that, as in other European countries, trucking is carried out unaccompanied by police escorts along established corridors, and stopping would be allowed at predetermined areas.

Consideration is also being given to reducing the amount of tolls for Croatian citizens from 10 to 20 percent, the possibility of opening air routes within Croatia and relaxing travel arrangements to the islands.

Construction will certainly be one of the key branches of the economy this crisis year, and the Ministry has propsed three measures: accelerated digitization for obtaining all permits, faster flow of supplying construction materials, opening shops with construction materials, and solving problems with foreign labor power.

The Ministry of Agriculture proposes to pay HRK 350 million in incentives to the forestry industry for export, the same amount of incentives to the food industry with more than 250 employees, and to pay the first and second installment of the incentive for spring sowing.

The Ministry of the Economy will propose the gradual opening of non-food stores, with more models being discussed based on other European countries. Specifically, some countries have begun to open smaller stores as space is concerned, however, some activities are not as risky, even though they have large retail outlets, such as car dealerships, in which the daily flow of customers is low.

Consideration is also given to opening various trades, such as hairdressers, beauty salons, and massage parlors, with strict measures of distance, limiting the number of customers and wearing masks. For example, if a hair salon has four chairs, two customers will likely be able to stay at the same time. There will also be various services, tech stores, watchmakers, carpenters - all where there is no physical contact and where there is little flow of people. The opening of gyms and fitness centers is still pending.

In the cultural sector, the proposal will be to open bookstores. In the education and science system, one of the first measures to be relaxed will be to open scientific institutes and research laboratories, which should start working from the end of April in an appropriate form. As for returning to the classrooms of elementary and high school students, these decisions are entirely dependent on the assessments of the Headquarters and epidemiologists, so there are no specific dates.

However, it is suggested that final and diploma exams may still be taken in schools and colleges, especially where it is necessary to test the practical skills of students. The State Matura exam is likely to be written in June, and Minister Blazenka Divjak announced on Friday that the mandatory exams - Croatian and foreign language and mathematics - would be written from June 8 to June 29 in this case.

When it comes to the judiciary, the pace of relaxation of restrictive measures also depends on others - a prerequisite for discussions to begin is the resumption of public transport. If there is no transportation, it is pointless to invite the parties to court.

Another factor, says Justice Minister Drazen Bosnjakovic, is limiting the number of people who can stay in one room at the same time, and the sheer size of the courtrooms that are miniature in many courts, which is now being addressed by space allocation. To ensure that the work of the courts does not depend solely on loosening restrictions, the Ministry of Justice is developing a system of distance hearings.

This is in the wake of a request by the Croatian Bar Association to have hearings in civil cases via video link.

Minister Bosnjakovic says that it is necessary to see if the courts have computers with cameras and to check whether any legal interventions are required.

All courts were instructed to prepare larger premises in which trials could be held in compliance with spacing measures.

You can see the overview of economic activities below:

1. Public transportation according to Sunday timetable

It is proposed to open public transport and suburban rail according to the Sunday timetable, catamaran transport for cargoes between Ancona and Zadar, air transport within the country and relaxing measures towards the islands.

2. Opening borders for cars

It is proposed to open the borders to our auto destinations, which guests and tourists could come from, and the Ministry of Tourism believes that the conditions of crossing the border should be as simple as possible to avoid waiting in traffic.

3. Camps first to open

In the tourism sector, it is proposed to start first with the objects closest to nature - camps, i.e., mobile homes with their own sanitary facilities, then private accommodation and holiday homes. There is also nautical tourism.

4. Cafes with terraces start to work

It is also proposed to open cafes and restaurants, but to begin with, only those catering establishments that have terraces and can provide sufficient physical distance between the tables and the guests present would start.

5. Hairdressers will have to wear masks

The Ministry of the Economy is also moving towards relaxing small craft measures. Hairdressers and other salons could work concerning all measures of distance, with increased hygiene, limiting the number of customers and wearing protective masks.

6. New rules for crafts and showrooms

There are also plans to open other stores, such as technicians, watchmaking and carpentry shops, various repair shops, but also showrooms, where there is a slower daily flow of customers. Fitness centers and gyms are yet to be considered.

7. Taking exams at universities

Science institutes and research laboratories will first open in the education system - from the end of April. It is suggested that the final and graduate exams be taken in schools and universities, and the state matura exam will be taken in June.

8. Solving problems with foreign labor

It is proposed to urgently amend the acts for the digitalization of the licensing system, the faster flow of construction materials, opening all shops with construction materials, and the solution of problems of foreign workers at construction sites.

9. Bookstores first to open in culture

The Ministry of Culture will propose to open bookstores in consultation with clerks, and say they are in contact with other stakeholders in the culture to suggest what is realistic and what can be realized in a situation of prolonged restrictions.

10. Court hearings via video link

The Ministry of Justice is developing a system of remote court hearings via video link. All courts were also instructed to prepare larger premises where trials could be held, with due regard for physical distance measures.

Follow TCN's live updates on the coronavirus crisis 

As Nikola Patkovic/Novac writes on the 3rd of April, 2020, in order to counteract the negative economic consequences of the ongoing coronavirus crisis, the City of Osijek has prepared a package of economic measures to assist Osijek's entrepreneurs who are facing business troubles because of this unprecedented and rapidly changing situation. The package is worth a massive HRK 18 million, and will be decided on by the Osijek City Council at a virtual session scheduled for Tuesday, April the 7th, 2020

''Over recent weeks, as the new situation caused by the COVID-19 pandemic has continued to unfold, all of our efforts have been focused, first and foremost, on the protection of the health of our fellow citizens, and in these efforts, the City of Osijek has partnered with both the local and the national authorities. Aware of the consequences that the crisis will have on the economy, we're giving equally important attention to the protection and preservation of every job in the City of Osijek. We don't know how long this crisis will last, but it's clear that we all have to adapt to this new situation,'' said Žana Gamoš, Osijek's Deputy Mayor, announcing the economic measures they have prepared.

Thus, they have decided that through a public call, a massive HRK 5.5 million will be directed towards small and medium-sized enterprises, as their businesses are at risk in this crisis. An entrepreneur based in Osijek who has proven that the coronavirus crisis has adversely affected his business and signed a grant agreement with the CES (Croatian Employment Service) may participate in the City of Osijek's public invitation. The city will pay the entrepreneur a one-time and non-refundable payment of HRK 1,000 per employee. The state is helping employees directly, and this Eastern Croatian city has decided to disburse funds to help with the maintainance of liquidity.

''By supplementing the Decision on communal compensation and the proposal of a Decision on the exemption from communal fee payment during these extraordinary circumstances caused by the COVID-19 virus, the City of Osijek proposes to completely exempt OPGs, craftsmen, legal entities and persons engaged in an independent activity for premises and construction land used for business purposes from needing to pay communal fees for the months of April, May and June,'' Gamoš reported.

In addition, no compulsory collection of debts will be enforced during these exceptional circumstances. The tenants of the public areas and business premises belonging to the City of Osijek have been exempted from making those payments for the month of April with the possibility of an extension depending on the duration of the unfolding situation. In addition, parents in Osijek will not have to pay for the use of kindergartens and extended stays in schools.

For more on business in Croatia, follow our page. For information on coronavirus in Croatia, follow our dedicated section.

As Novac/Adriano Milovan writes on the 3rd of April, 2020, due to the ongoing coronavirus pandemic, Croatia is facing a recession this year, with an estimated 6.1 percent drop in economic activity. The warning comes from Economist Intelligence Unita (EIU), a well-known London think tank affiliated with the Economist magazine, which assessed the state of the Croatian economy for Jutarnji list.

Tourism

Prianthi Roy, the EIU analyst in charge of Croatia, said that Croatia is far too attached to tourism, an industry that will suffer the brunt of the force of the pandemic worldwide. Therefore, we should work to diversify the economy and turn to the development of other industries, which is not an easy job and will take many years. In addition, they estimate in London, Croatia is too attached to Italy in the trade of goods as well as in the exchange of services, and as we all know at this point, Italy is currently the country most affected by the coronavirus pandemic in Europe.

The consequences of the coronavirus crisis will be felt in all areas of economic and social life across the Republic of Croatia. Personal consumption is low and trade in goods has been minimised. In London, they expect the Croatian budget deficit to reach 3.1 percent of GDP this year, while public debt will jump to 81 percent of GDP. The current account deficit, which includes the exchange of goods and services abroad, will reach 2.8 percent of GDP. However, the EIU doesn't expect that Croatia will have a problem with borrowing on the foreign market, nor will the stability of the kuna be called into question, although a slight depreciation can be expected.

The coronavirus crisis will be mostly felt in the second and third quarters, which will be in the negative. Unemployment will also increase, despite all of the government measures.

Slow recovery

Recovery, on the other hand, will be slow. The EIU expects Croatia to achieve an economic growth rate of just 1.2 percent next year. In doing so, it will not be able to count on traditional industries, such as shipbuilding, which has had major problems long before this crisis began.

''We don't expect a return to potential GDP growth rates before 2022,'' concluded the EIU interlocutor.

Although EIU forecasts sound rather catastrophic, Croatian macroeconomists are even more pessimistic about economic developments in Croatia. Moreover, many of them are adjusting their earlier forecasts to these new circumstances, which continue to change from day to day.

Among them is Zrinka Zivkovic Matijevic, a macroeconomist at Raiffeisen, who recently came out with a forecast of a fall in Croatia's GDP of about five percent this year. Now, however, she fears that this drop will be much larger.

''This year, I expect an 8.5 percent drop in Croatia's GDP. This forecast is based on the complete loss of the preseason and the loss of 60-70 percent of the main tourist season,'' said Zivkovic Matijevic.

In particular, warned Zivkovic Matijevic, the second and third quarters in which the most tourist traffic is realised will be critical. The recovery, she added, can be expected next year, in which Croatia can achieve GDP growth of up to three percent.

Zeljko Lovrincevic from the Zagreb Institute of Economics fears that the coronavirus epidemic will be a major blow to the Croatian economy this year. And while in the first quarter, says Lovrincevic, some modest economic growth can be expected, given that January and February, both economically speaking, weren't so weak, the second and third quarters could prove critical. Therefore, Lovrincevic expects that for the time being, Croatia could have a fall in economic activity of about seven percent this year.

''It will all depend on what happens with the coronavirus pandemic, which cannot be estimated at this time. But we have to keep in mind that Croatia is a service economy and that it isn't sufficiently digitised, which means that lockdown is an enormous hit,'' he said.

In the next year, he says, stagnation or a slight recovery may be expected depending on the development of the coronavirus situation, and in particular whether or not a vaccine will be found.

''It will take us five or six years to return to [the levels of] 2019,'' warned Lovrincevic.

''The decline in economic activity in Croatia will be larger than that of 2009. It wouldn't be surprising at all if we have a double-digit GDP decline this year because the whole world is affected by the crisis,'' said macroeconomist Goran Saravanja.

He warned that Croatia is a small and open economy, which is highly dependent on developments in the environment, which is especially true of the country's leading foreign trade partners, among which the enfeebled Italy holds a special place. Recovery can be expected in 2021, but Saravanja pointed out that this won't happen quickly.

Make sure to follow our dedicated section for rolling information and updates on coronavirus in Croatia.

The economy is suffering tremendously with this unprecedented coronavirus outbreak, and now that the figures for Croatian labour demand in March 2020 are available, it's enough to make anyone concerned about the state of things.

As Adriano Milovan/Novac writes on the 2nd of April, 2020, following the outbreak of the coronavirus crisis, now being somewhat ''affectionately'' known as the coronacrisis, Croatian labour demand has fallen sharply, according to the OVI index of the Zagreb Institute of Economics.

Compared to March last year, in March this year, the OVI index fell by as much as 23.3 percent, while the monthly fall was 18.5 percent when compared to just one month before, in February. The Institute of Economics points out that there has been a big decline, which, however, still cannot be compared to the economically tragic year of 2009, when the OVI index fell significantly more strongly.

"This March index reflects the disruption of social and economic activities caused by the coronavirus pandemic," the Institute of Economics said briefly.

A particularly strong fall in March was seen in Croatian labour demand in the service sector. But in some professions, such as those in medicine, pharmaceuticals and the construction industry, there has been a significant increase in demand for work.

Viewed by region, all regions except Slavonia recorded a fall in Croatian labour demand in March 2020. Slavonia, on the other hand, had almost the same demand for work as it did in March last year, which isn't a particularly promising statistic to go on regardless of coronavirus.

The OVI index, a monthly labour market indicator developed by the Institute of Economics and the Moj Posao (My Job) portal, is in line with official data from the Croatian Employment Service (CES), which shows that in the second half of March 2020, the number of unemployed people in Croatia increased by over 13,000, of which more than 12,000 came from having been employed.

However, part of those unemployed people did go on to find a job in March, meaning that Croatia ''welcomed'' 143,454 newly unemployed people at the end of March, according to data.

Make sure to follow our dedicated section for rolling information and updates on coronavirus in Croatia.

As Poslovni Dnevnik writes on the 31st of March, 2020, with the aim of contributing to the economic stability of the Croatian economy, preserving jobs and ensuring the financial liquidity of businesses operating here, AmCham (the American Chamber of Commerce in Croatia) has announced a proposal for additional measures to assist the economy in the wake of the coronavirus epidemic.

"We believe that in this situation, it's necessary to focus the measures on maintaining the liquidity of businesses, maintaining employment and jobs, securing supply chains for businesses, stimulating consumption after the crisis and on tax relief," said Andrea Doko Jelusic, executive director of the American Chamber of Commerce in Croatia, adding that AmCham's measures have been prepared in accordance with the adopted measures of the Government of the Republic of Croatia and in accordance with the good practices of other countries.

To ensure liquidity, the American Chamber of Commerce in Croatia proposes, among other things, the establishment of HBOR government loans and guarantees (worth ~ 10 percent of GDP in line with the experience of other countries); the setting up of funds for industrial sectors which are the most severely affected by the crisis (such as Croatian tourism); the securing of funds for SMEs with impaired liquidity through the approval of credit lines with a two-year repayment obligation and a 0 percent interest rate (modelled on what is being done over in the Czech Republic).

Regarding the proposal for job retention measures, they refer to the introduction of part-time work models; the mandatory use of holidays during the coronavirus crisis; subsidies to workers in the private sector (based on the Austrian and Slovenian models) and through the write-off of income taxes and contributions during the crisis period due to the coronavirus pandemic.

"It's also extremely important to ensure the smooth flow of goods, raw materials and key raw materials needed for the production [capacities] of industries who are currently of strategic importance, as well as exporters, that is, we need to find a way to ensure that strategic enterprises don't end up lacking raw materials, repro materials, etc,'' Doko Jelusic stated, adding that the American Chamber of Commerce in Croatia is already working on an additional proposal for measures that could mitigate the negative effects of coronavirus on the economy and help businesses overcome hardships in the upcoming period.

"Given the current circumstances and the earthquakes that hit Zagreb, the American Chamber of Commerce in Croatia additionally proposes that a provision be made to make deliveries VAT free to hospitals and scientific/educational institutions, which would make it easier for businesses to donate to hospitals and scientific/educational institutions, and contribute to reconstruction and assistance during this crisis period,'' concluded Andrea Doko Jelusic.

AmCham's "Business Assistance Recommendations" are available in Croatian via this link.

The Croatian Employers' Association (HUP) has demanded a new set of measures be implemented by the government to rescue the Croatian economy. They claim, among other things, that mere payment delays are far from enough.

As Novac writes on the 29th of March, 2020, HUP's chief executive Davor Majetic said: ''Continuing on from the GSV session held on Friday, the Croatian Employers' Association reiterates the need for the Government of the Republic of Croatia to urgently adopt new measures to save the Croatian economy on the principle of "zero income, zero expenditure,''

HUP, as he claims, has repeatedly "clearly and unambiguously stated to those in power and to the public what they have been demanding on behalf of businesses and employers", which is a write-off of all fees, contributions, para-fiscal levies, various redundant membership fees, and just not delays needing to pay those things.

''We're seeking that urgently! We can talk about delays during the ''post-corona'' period, not now when a large number of Croatian companies don't know if they will even exist next month,'' HUP stated, warning of the grave threat to the Croatian economy.

In addition, they said they expect a high level of accountability, fact-finding and argumentative debate from all stakeholders in social dialogue, and not merely the "cheap populism that is now appearing in the media by creating distorted personal impressions such as insinuating that HUP is seeking pay cuts for healthcare professionals and other falsities,''

HUP reiterated the measures that should take absolute priority and drew attention to the fact that they have created a whole series of measures and recommendations for all sectors of the economy and that they expect that politicisation will cease at this extremely difficult time for the Croatian economy.

''Immediate realisation and determination is what we need now. If we lose time, we lose the Croatian economy. If we lose the economy, we will lose the country,'' said Majetic.

Here is a list of everything that HUP is asking of the Croatian Government and what they have proposed so far:

1. On March the 3rd, we proposed to the Government a measure to preserve jobs, which would pay support on a part-time basis as a proportion of the amount of wages for the number of hours that a worker doesn't work

2. During business inactivity, employers cannot pay contributions and taxes with delay, the state must write off all of those fees

3. It is necessary to suspend the payment of all mandatory membership fees and charges for the duration of business inactivity and the suppression of coronavirus

4. It is necessary to write-off payments to LSGs

5. The total abolition of all other taxes and fees for concessions during the crisis needs to happen, not just delays

6. The reduction of the corporate income tax rate and the deferred payment of corporate income tax advances

7. The abolition of the payroll obligation/prescribed annual basis for directors

8. The obligation to pay VAT on paid realisation starting on March the 1st, 2020 for deliveries that followed after March the 1st, 2020 must be introduced

9. The suspension of foreclosures on tax payments during a state of emergency must be introduced

10. Credit reprogramming and refinancing must take place

11. The international flow of goods must be ensured

12. There must be a declaration of force majeure

13. A delay of deadlines for the submission of reports, forms and final accounts due to difficulties caused by the pandemic must be introduced

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