January the 16th, 2022 - Economic analyst Andrej Grubisic has spoken among a series of others to state his feelings about the recently released official Croatian 2021 Census data, noting an uncomfortable truth about just how many people are employed in the country's public sector.

As Poslovni Dnevnik writes, economic analyst Andrej Grubisic was a recent guest of N1 on which he commented on the repercussions of a smaller number of residents of the country on the sustainability of the pension system. He says fewer people in the country means that they will see the greatest repercussions of pressure on the pension system from a long-term perspective.

"In my opinion, these are the biggest challenges. We undertook an analysis that showed that about 100 and something thousand people experienced a negative natural increase. What the data shows is that for one million and 240 thousand pension beneficiaries, when you have 2.5 million able-bodied residents, we have about 50 percent of pension beneficiaries for every single able-bodied resident,'' explained Andrej Grubisic.

The pension system, he says, is sustainable, but it will not be able to produce higher pensions in real terms. "The question is what reasonable adjustments would be made, given the facts we're dealing with. A solution is likely to be sought by force in a few things. One is the opening of the borders, I think that Croatia will have to liberalise the import of labour,'' said Amdrej Grubisic.

He also spoke about what he considers to be one of the sources of that desired labour.

"I think that one of the sources that is not often talked about in public space is that there are a significant number of quite frankly redundant people working in the public sector. In the Croatian public sector, in the broadest sense of the word, with four hundred thousand people who are tied to the central budget, local budgets and public companies... If you start from the fact that 10 percent of that workforce is redundant, that’s equal to 40,000 people.

That's an extremely significant pool of people. If they ended up in the labour market, some of them would be forced to take up jobs in the private sector. We have relatively young retirees, who are retired but are still very much able to work. The work of pensioners needs to be liberalised. All barriers need to be broken down in order for people to work if they want to. There can be no progress if there aren't enough of us, with a special emphasis on job productivity,'' Andrej Grubisic concluded.

For more, check out our dedicated politics section.

January the 8th, 2022 - The richest Croatian municipalities enjoy incomes as high as the 24 poorest in the country put together, which means there's some seriously huge wage disparity in Croatia. Rather unsurprisingly, they're all located in Istria.

As Poslovni Dnevnik writes, a new analysis undertaken by the Institute of Public Finance shows that back in pandemic-dominated 2020, the Istrian municipality of Medulin was the richest municipality in all of the Republic of Croatia. It generated the highest total revenues, totalling 77 million kuna, which is equal to the sum of the total revenues of the 24 poorest municipalities put together.

Interestingly, the total revenues of the ten richest Croatian municipalities, 530 million kuna, are equal to the sum of the total revenues of one quarter of all of the country's quite numerous municipalities. Among the Croatian municipalities with per capita income of more than 10,000 kuna, as many as 17 of them 29 are located close to the coast.

''We're really far ahead of other Croatian municipalities in terms of budget realisation. Since we're mostly a tourist destination, surviving the pandemic-dominated year of 2020 was a challenge, and recovering the level of income we once had is even greater,'' Medulin Mayor Ivan Kirac told local portal Glas Istre.

''Despite everything, I expect a significant increase in revenue this year. In the future, we're planning to base all of our strategies on income diversification, so I hope that we will create an even more resilient system to such troubles,'' explained Kirac.

The Croatian municipalities with the largest budget per capita include the Istrian municipalities of Kastelir-Labinci (2,700 kuna) and Oprtalj (2,600 kuna), which are in third and fourth place on a national level.

The Institute of Public Finance says that when interpreting the financial situation of Croatian municipalities and cities, one should be careful because many municipalities and cities have a high share of state and/or EU aid in total operating revenues in a given year, which doesn't typically apply to those located by the sea.

According to the Institute of Public Finance, Medulin maintained its leading position throughout 2020, when the coronavirus pandemic negatively affected the budgets of local governmental units and resulted in a decline in average total revenues and an increase in average deficits.

The Institute of Public Finance says that their analysis should encourage the public to further study the databases of the Ministry of Finance and its local governmental units, and get more detailed information on collecting and spending money from local budgets, Glas Istre writes.

For more, check out our dedicated lifestyle section.

January the 4th, 2022 - What made ''Croatia 2021'' be what it was? From the arrival of the long awaited coronavirus vaccines to Mate Rimac's continued business successes to the recovery of the tourism industry with an unexpectedly remarkable summer season, the list is extensive.

As Poslovni Dnevnik/Karlo Vajdic writes, as we draw the line under the previous twelve months, we need to look at both the good and the bad and make assessments and plans for the future. Let's go back in time to Croatia 2021 and try to highlight the events that stood out for the domestic economy, and also provide some sort of general assessment of the state of the Croatian economy last year.

Business is still less than free, it's true to say this is somewhat less than what experienced in 2020, but costs continued to rise in 2021, and there is no sector that isn't desperately craving a full recovery, although at least some of them are finding doing business easier than they did in 2020.

All this was reflected in the numbers. After the shocking events which dominated 2020, the domestic economy experienced a strong jump in the second and third quarters of last year. Gross domestic product (GDP) was more than promising. Back in mid-December 2021, the central bank published forecasts estimating that GDP growth in 2021 would total 10.8 percent.

The year before, in 2020, there was a decline of 8.1 percent, but for 2022, growth of around 4 percent is expected once again, so it seems that we will successfully return to our own average. The Crobex index jumped nearly 20 percent from the end of 2020, but turnover is lower. Throughout the whole of 2020, it amounted to 3.13 billion kuna, and last year, it totalled 2.54 billion.

In general, the question can be asked whether the economic year for Croatia 2021 should be compared with 2020 or with pre-pandemic 2019 in order to have a somewhat more realistic assessment of the state of the domestic economy? In the search for an answer to this question, let's recall some of the key events that marked the economic year of 2021.

In business, the most high-profile event of the year was undoubtedly the merger of Rimac automobili and the legendary luxury vehicle manufacturer - Bugatti. The Bugatti Rimac company is jointly owned by the Rimac Group (55%) and the German giant Porsche (45%), and the company is headed by Livno-born entrepreneur Mate Rimac. The transaction turned into a true spectacle, and the company was even visited by the President of the European Commission (EC) Ursula von der Leyen during her stay in Zagreb back in July.

Political meddling with business didn't stop at mere courteous visits, but the decision to allow Rimac's company to build a new production and development campus in Sveta Nedelja on preferential terms raised a lot of hope for the public. This was followed by the allocation of 200 million euros from the European aid package for economic reconstruction to Rimac's plan for the development of an autonomous vehicle and taxi service in Zagreb by the year 2024. Last year, Rimac continued to be plastered all of the newspapers, hailed a hero.

Another high-profile event in the same category was the sale of Zagreb's Ledo frozen food factory and its subsidiaries. Fortenova (formerly Agrokor) announced in late September that the sale of Ledo to the British corporation Nomad Foods had been concluded, and the transaction itself was worth a massive 615 million euros. In addition to these two major transactions, last year was marked a number of smaller ones, including the sale of the Sunce hotel chain by entrepreneur Jako Andabak, who sold his 11 hotels to the Eagle Hills investment group. The sale of the Croatian manufacturer of glass pharmaceutical packaging, Piramida, to the Japanese conglomerate Nipro was also interesting.

The third high-profile event which marked last year came from the category of stock market listings, and that was the initial public offering of Span shares and their listing on the Zagreb Stock Exchange. The well-known domestic IT company eventually sold its shares at the maximum anticipated price, 175 kuna, and in the meantime their value jumped by an additional 33 percent.

Unlike Span's listing on the stock exchange, the delisting of shares of PBZ, Dukat and Magma, once very happy to trade on the domestic market, went in the opposite direction While Span's listing as a modern Croatian IT company is a laudable illustration of recent, much more digital times, Croatia 2021 didn't disappoint in terms of events related to companies such as the proverbial anchor wrapped around the legs of the Croatian economy and of the local political scene.

The agonies experienced by the enfeebled shipyards (3. Maj and Uljanik) continued, and the troubles faced by the Brodarski Institute in Zagreb ended with a political decision.

With a payment of 45 million euros, the Slovak Tatravagonka took over production in Zagreb's Gredelj and thus concluded the company's long-term bankruptcy proceedings. Just before the end of the year, Djuro Djakovic got another chance to survive when the European Commission (EC) approved Croatia to grant Djakovic, which was restructuring support in the amount of 57.4 million euros.

The planned recapitalisation of Jadroplov failed, the Turkish corporation Yildrim showed interest in the Kutina-based Petrokemija, and the financial restructuring and recapitalisation of Dalekovod became even more complicated.

On the other hand, there was some good news from the blossoming domestic IT sector, traditionally ignored in political debates and games, probably because the vultures in politics don't really understand it all that well. That's for the best, it seems.

Vodnjan's incredible Infobip announced their takeover of the American company Peerless Network and the Irish company Anam Technologies. That same Istrian company also announced its listing on the American stock exchange. At the end of the year, Konzum announced that it was starting to accept Bitcoin as a means of payment in its online stores, thus joining the Tifon fuel station chain, which enabled customers to do the same back at the beginning of the year.

Croatian enterprises and their leaders, despite the pandemic, haven't completely lost heart. Nasice's NEXE announced an investment of 123 million kuna in modernisation and new products, and BAT announced an investment of 200 million kuna in their factory in Rovinj. A similar amount of investments in capacity growth was announced by the Medjimurje-based packaging manufacturer Muraplast, and an investment of as much as 200 million euros in the construction of a laminate factory in Ogulin was also announced.

From last year's high-profile personnel transfers, it is worth mentioning the arrival of former Minister Martina Dalic to the helm of Podravka, a position to which she was appointed at the beginning of February. In the very same sector, and at about the same time, Nenad Klepac was appointed head of Vindija, succeeding the late long-time owner Dragutin Drko. The first man of the Croatian Chamber of Commerce (HGK), Luka Burilovic, also won a third term at that institution back in October.

Some important news related to the Chamber of Commerce itself, and that was the much anticipated passing of a law abolishing the mandatory payment of membership fees for small businesses. Also related to the Croatian Chamber of Commerce is some news from the margins of economics and politics published just before the end of the year, that former longtime head of the chamber Nadan Vidosevic was found guilty of withdrawing money from the Croatian Chamber of Commerce and was sentenced to eight years in prison with the obligation to return 35.5 million kuna to the Chamber.

From the same marginal economic and political position, it is impossible not to mention the death of Milan Bandic, the former mayor and long-time master of Zagreb's local economy, which accounts for a third of Croatia's GDP. Bandic died prematurely and suddenly from what was then cited as a massive heart attack, although many questions surrounding his death remain, even from his widow, Vesna.

The new mayor, Tomislav Tomasevic of Mozemo! (We can!), and the new Zagreb administration have inherited the fight against Bandic's legacy with that they claim to be a ''devastating situation'' in terms of the capital's finances. These issues were only heightened by the earthquake of March 2020.

The post-earthquake reconstruction of Zagreb and Banovina, which is still ongoing and moving at a shameful snail's pace, is the subject of a story about the role of Croatian politics in the domestic economy, which has been repeated for the third consecutive decade. The fiasco with the reconstruction of Zagreb and Banovina is reminiscent of the reconstruction of almost the whole of Croatia after the war in the 1990s.

While back then, issues were due to bad politics and politicians, the opportunity was missed to rebuild the Croatian economy at the same time from the remnants of socialism and the remnants of war, now a similar story is being repeated, only with an indiscriminate natural disaster at play.

The difference is that two and a half decades ago, politicians were unable to create a framework in which to exploit Croatia's potential, then expressed in the number of unemployed people that occasionally approached the level of 400,000, while today politicians are unable to create a framework in which to used the potential of financial assistance provided by the European Union. That said, Prime Minister Andrej Plenkovic and the rest of the political elite have repeatedly tried to gild the role of the Government in Croatia's economic rust over the past year. Among them, we can single out two moments for this occasion.

The first is the development of the famous National Recovery and Resilience Plan. A comprehensive document of more than 1,200 pages was drafted by the government as a justification for withdrawing money from the EU's Recovery and Resilience Mechanism. This is a document that acts as if no one has even ever read it in its entirety and is quickly being seen as just another pile of projects, wishes and empty phrases like countless other unimplemented strategies and plans written and shelved over the last twenty years.

The second bright moment for Croatian politics came back in mid-November when the credit rating agency Fitch Ratings announced that it had raised Croatia's rating to BBB. Prime Minister Plenkovic and Minister of Finance Zdravko Maric hurried to welcome the good news in front of the public, which included the euphoric remark that this is the highest rating for Croatia in history.

What was left out of these celebrations was the fact that that rating was only one level higher than the BBB- rating that Croatia had when it first received a rating way back in 1997 - just two years after the Homeland War secured the nation its independence and saw the collapse of Yugoslavia. At this rate, we'll reach the highest AAA category in a mere 192 years!

Is that why everything is still bleak and everyone is still busy lining cafes and complaining over three hour long coffees? No, Croatia 2021 also gave us some excellent news. For a start, the tourist season was more or less successful, unexpectedly and quite remarkably. Data from the Central Bureau of Statistics shows that from the beginning of July to the end of September last year there were 9.36 million tourist arrivals and that guests realised 57.3 million overnight stays. The arrival of the coronavirus vaccine had a lot to do with this, and visitors saw Croatia as an epidemiologically safe country, especially when compared with its Mediterranean competition.

Compared to the pre-pandemic year of 2019, this is a ten percent lower number of overnight stays and 16.5 percent fewer guests. For yet another pandemic-dominated year, Croatia 2021 did very, very well in this regard.

Export results for Croatia 2021 are even better. In the first ten months of last year, merchandise exports exceeded 15.1 billion euros. There is no doubt that by the end of the year that amount was exceeded and if there is one thing that can make us happy, it is the success of the exporters who suffered terribly as a result of the pandemic. These are mostly small and medium-sized companies that aren't very widely heard about, but which, despite their policies, continue to invest in their capacities and modernisation in order to take full advantage of what it means to have EU membership.

This, in addition to the promising domestic IT sector, is making an apparently clean break from at least one part of the domestic economy, which is the tradition of inefficient, lethargic, economic mastodons who are lost in time and space, giving hope for a brighter future as we walk into 2022 and beyond.

For more, check out our dedicated lifestyle and business sections.

December the 11th, 2021 - Croatia Airlines' main man Jasmin Bajic has stated that the national carrier is more than ready for Croatian economic recovery as hopes to finally put the horrendous coronavirus pandemic behind us grow.

As Poslovni Dnevnik/Jasmin Bajic writes, the global health crisis is having an extremely devastating effect on the world's air transport industry, which is among the most affected economic activities, and the coronavirus pandemic will continue to be the biggest immediate threat to the airline and travel business next year.

Forecasts of the most relevant international aviation associations and organisations say that this is the longest and worst crisis and it is predicted that the recovery of air traffic will take longer than it did during previous crises, and it is believed that a full return to pre-crisis levels can be expected only in 2024.

In particular, according to the International Air Transport Association (IATA), airlines globally made a historically record loss in 2020 of $137.7 billion, with an average loss per passenger of $76.2 billion.

For the year 2021, IATA estimates total airline losses to stand at $51.8 billion, and in 2022, the projected losses seem that they'll be reduced to $11.6 billion. The pace of recovery will be determined by the implementation of vaccination programmes and the complete lifting of border restrictions, which, together with uncertainty and complex regulations on passenger traffic, are hampering international travel to this day.

In the implementation of the risk management process of Croatia Airlines, the most important risks were identified according to the possible impact on the company's operations, the monitoring of which should ensure mitigation of possible negative consequences and transformation of risks into opportunities, wherever possible. Reduced demand for air transport services is a significant additional risk, which imposes the need for the continuous and up-to-date adjustment of capacity supply and constant optimisation of flight schedules.

Regular traffic planning will continue to depend on external factors beyond the company's control, such as travel and border restrictions, bans and other measures issued by the National Civil Protection Directorate, which directly affect the ability to travel in both domestic and international regular traffic.

Accordingly, Jasmin Bajic says, Croatia Airlines will continue to focus on the flexible planning of their flight network with a forecast of demand for certain types of travel, and they will strive to achieve optimal occupancy and the average tariff in traffic conditions with reduced capacity.

However, a certain optimism we're witnessing is based on the latest forecast of the International Monetary Fund, which in 2022 predicts the continuation of the recovery of the Croatian economy, ie growth of 5.8 percent. In this context, Croatia Airlines says its focus in 2022 will primarily be placed on cost rationalisation and the implementation of the company's now well defined post-covid strategy.

Jasmin Bajic stated that the company continue to take all measures of active liquidity management and business optimisation, as well as the further application of rigorous austerity measures. During this year, the company worked with the leading international strategic consulting company BCG to develop a good post-covid strategy to define strategic initiatives, the implementation of which, with the prior consent of the majority owner of the Government of the Republic of Croatia, will last three years and enable sustainable business.

For more, check out our dedicated business section.

December the 8th, 2021 - A decline in tourism, and as such Croatian tourism investments, can more or less explain almost the entire decline in GDP. A massive 8.1% decline back in 2020 was certainly not what anyone needed, or could have ever imagined coul happen after the record year of 2019.

As Poslovni Dnevnik/Marija Crnjak writes, the overall decline of GDP in Croatia back in pandemic-dominated 2020 can be explained by the decline in tourism, the most affected industry that has led to a decline across all related sectors, while at least 4.5-5 percent of total GDP growth in 2021 can be attributed to the subsequent recovery of tourist traffic.

This shows the exceptional importance of tourism for the Croatian economy, but despite a significant increase in tourist traffic this year, the situation remains dramatic as the crisis has caused a sharp drop in Croatian tourism investments and the recovery will not be spontaneous without additional investment incentives from the state.

Analyst Velimir Sonje warned about precisely that, presenting his research on the connection between tourism and the pandemic recently at the Congress of Hoteliers, organised by the Croatian Hotel Employers' Association (UPUHH).

“Croatian tourism investments and its activity is in a sharp decline of 60-66 percent when compared to 2019 and the duration of such a situation threatens to weaken the positive development effects of tourism, such as a proven contribution to alleviating emigration from Croatia. We got the impression that after this season, which was short, but successful, that everything would be fine and that we're finally returning to normal. But a spontaneous recovery won't happen unless there is a strong recovery in investment soon. This requires investment incentives, and investors' expectations are focused on the new Law on Investment Promotion and the implementation of a new regional aid map,'' explained Sonje, whose research is based on the results of a survey among the ten largest hotel companies in the country, with total revenues of 5 billion kuna recorded back in 2019.

"Paradoxically, despite the fact that tourism is crucial for economic recovery, the European Commission has allocated only 5 percent of the total amount from the National Recovery and Resilience Plan to this sector," concluded Sonje.

The Director of the Croatian Tourism Association, Veljko Ostojic, pointed out the four biggest challenges that the hotel business will face in 2022. With the return on investment, after the 2021 season in which Croatia had the best tourism results in the Mediterranean and Europe, the biggest challenge in preparation next year will be the sheer lack of qualified personnel, an issue present in the sector throughout Europe at the moment.

"In Croatia, it isn't only a question of engaging domestic workers, but also a faster and more flexible administration in hiring foreign workers. The second most important issue will be the continuation of investments in quality, without which Croatia will not be competitive in relation to other Mediterranean countries in particular. There will be an important contribution of money for NPOO projects, but also the legislative framework, primarily addressing the issue of tourist land. We're in intensive talks with the Ministry of Construction and State Property and I believe that in the coming weeks we'll be able to find solutions that will enable investments and generate significant revenues to the state budget,'' believes Ostojic.

The fourth important factor will be the unfolding epidemiological situation, which is still a challenge and a trigger for the majority choosing a holiday destination, but Croatia and the sector have done a great job in the last two years, so there are no severe worries. Hoteliers also point out the important challenge that inflation and the situation with supply chains will pose in financial operations.

"It will be a very big challenge that we won't be able to mitigate through rising prices and many will not be left for investment. Without the help of the state, through the Law on Investment Promotion and similar solutions, we cannot expect the recovery of the investment power of the tourism sector,'' warned Popovic.

For more, check out our business section.

December the 7th, 2021 - We often hear all about how employers just can't get the staff and need to instead go into battle with MUP's pen pushers in order to hire third country nationals from Bosnia and Herzegovina and Serbia, but is that really the case? Not always. There are plenty of would-be Croatian workers, but they aren't about to jump for joy working for minimum wage with no days off.

As Poslovni Dnevnik/Marija Crnjak writes, the search for Croatian workers in tourism for the next summer season has never started earlier than now - all tourist companies typically use the low season for active searches not only for seasonal workers but also for a permanent workforce that can expect better conditions than in they had over the last two years.

Hotels offer slightly higher salaries, and are looking for seasons which span a more generous period of 4 to 7 months, which suggests that they are counting on a decent tourist season in summer 2022.

However, their task is not easy, with the continuation of the trend of migration of Croatian workers to the west, the pool of workers from Serbia and Macedonia has been significantly reduced, whose work in Germany and Austria has also been much more simplified since this year.

At the same time, this year the trend of emigration of German and Austrian workers to Switzerland, where higher salaries are offered, has intensified. This is just a part of the insight into the lively labour market revealed by Natasa Kacar, the director of the employment agency Gate2Solutions and the Job in Tourism portal, one of the leading platforms that connects supply and demand for workers here in Croatia and across Europe.

"At this time of year, we mostly dealt with the winter season at ski resorts, and this is a really unusually active autumn for Croatian employers. It is completely different than last year, when it was not known when and how the season would start, and the search for Croatian workers started practically with the very arrival of the season, and as such, there was chaos.

We're now noticing a lot more optimism from employers for next year, but also fears that they will be left without Croatian workers again. At the same time, there are more Croatian workers out there willing to do a goo job than it seems, but they can no longer allow themselves to be exploited and that is the basic thing that employers must keep in mind,'' points out Kacar.

"Posao u turizmu/Jobs in tourism" has been uniting a dozen local and foreign employment agencies as a specialised portal and mediation agency for six years now, and in addition to Croatia they are present in Bosnia and Herzegovina, Serbia, Macedonia, Montenegro, Slovenia, Switzerland and Austria through their agents and branches. They're also active in Germany, Malta, Ukraine, India and even in Dubai.

The founder of the portal is Tin Tomljanovic, an award-winning Croatian bartender. The combined base and channels through which they communicate the needs of workers ensure that they quickly find workers for their partners. They also offer the possibility of importing workers from other EU member states and from third countries, from Turkey, Greece, Bulgaria, but also Ukraine, the Philippines and Thailand.

They mediate not only in the employment of seasonal workers, but also in permanent employment for an indefinite period. Natasa Kacar also claims that they are contacted by Croatian emigrants who would like return home, but having experienced life (and salaries) abroad, they have their own conditions.

“Those who emigrated to work in Austria, Germany, Switzerland, Ireland, cruise workers... they all clear employment conditions there, from wages higher than there, to accommodation and food, and they of course got used to one or two days off per week. With the exception of mostly large serious companies, in Croatia there is generally no guarantee of a salary, which is usually the minimum wage, and the rest is paid in hand. There are often no days off, especially during the height of the summer season, and work is done without a break for 12-14 hours when there are many people around. In Switzerland, work is carried out for 9 hours with a break of 50 minutes, which must be used because otherwise employers risk fines, if they work in hotels, then they're free for two days a week every week.

Croatian workers now know exactly where and what they're going for. When I tell my employer that I don't have a worker who will work without a break and a day off, restaurant owners can say that the nature of the job is such that it is done without a break. Maybe it can be like that for the owners, bur the workers no longer agree to that, especially the younger ones, and employers have to be ready for that,'' says Kacar.

Besides, salaries outside of Croatia's borders are typically much more attractive. A recently announced tender published on the portal is one which is looking for chefs, bartenders and waiters for the winter season over in Switzerland, for seasonal jobs with the possibility of permanent employment. Salaries range from 3,900 to 4,400 euros gross (minus 13-20 percent to the net amount), accommodation and meals are provided at an additional cost, as employers co-finance the rental of all apartments.

In Austria, a head waiter typically receives about 1,900 euros net, in Croatia they work just as hard only to take home somewhere between 7,000 and 9,000 kuna, while maids work a maximum of 8 hours a day in the sweltering Croatian summer heat with just one day off.

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

December the 1st, 2021 - Croatian economic recovery expectations are looking a little brighter as we begin to slowly but surely emerge from the global coronavirus pandemic.

As Poslovni Dnevnik/Jadranka Dozan writes, if business leaders were to be asked, Croatian economic recovery expectations in the past month have been somewhat more optimistic than the month before. In contrast, among consumers themselves, the perception seems to be more susceptible to the development of the epidemiological picture of the time, meaning that in the last study their expectations actually decreased.

These are, in short, the main findings for the Republic of Croatia and the domestic economy from the latest report of the European Commission (EC) on the economic climate in the member states of the European Union (EU).

While the economic climate index (ESI) at the EU level last month slightly (by one percentage point) deteriorated when compared to the month of October, in Croatia it rose by slightly less than two percentage points, up to 111.3 points. The most pronounced growth of expectations among the domestic business community was shown by the construction sector (with an index growth of as high as 6.3 points).

Although a solid increase in optimism was recorded among the leaders of industrial companies, and somewhat milder in the trade and service sector, it was the wave of optimism among builders that outweighed the somewhat more pessimistic expectations of consumers.

Namely, among people themselves, reduced Croatian economic expectations were reflected in a drop in the index by 2.7 points. From the business sector for the next period, signals are coming in about the intentions of increased employment, although due to the ongoing pandemic, procurement problems are still likely to remain an issue.

At the level of the entire EU, the decline in consumer sentiment prevailed in the overall Croatian economic expectations, although they also improved slightly in the month of November among the European Union's business people, and employment expectations were also positively intoned.

For more, check out our dedicated politics section.

ZAGREB, 29 Nov 2021 - Expectations for the Croatian economy improved in November on the back of optimism in the construction sector, which outweighed a marked decline in consumer confidence, according to a report by the European Commission released on Monday. 

The Economic Sentiment Indicator (ESI) for Croatia grew by 1.9 points from October to 111.3 points in November.

Construction confidence increased the most, with the relevant indicator going up by 6.3 points.

Industry confidence grew as well, by 2.8 points.

Expectations in the retail and services sectors also improved, albeit much more slightly, with the indicators going up by 1.2 and 0.8 points respectively.

Consumers, on the other hand, were pessimistic, with consumer confidence going down by 2.7 points.

Managers had signaled increased hiring in the coming period, which resulted in the Employment Expectations Indicator (EEI) going up strongly, by 3.5 points compared to October.

The coronavirus pandemic and problems in the supply chain continue to cause uncertainty so the new indicator, the Economic Uncertainty Indicator (EUI) in November rose by as much as 4.2 points compared to the month before, to 8.6 points.

Consumers pessimistic

The economic climate in the EU in November deteriorated compared to October, as evidenced by a drop in the indicator of one point to 116.6 points.

Pessimism also affected expectations in the euro area, whose indicator dropped by 1.1 points from October to 117.5 points.

The sentiment in both the EU and the euro area was marked by that of consumers, who expect worse times, with consumer confidence dropping by 2.1 points in the EU and by 2 points in the euro area.

Managers in the retail sector, on the other hand, are optimistic ahead of the Christmas shopping season, which has driven up the indicator by 1.6 points in the EU and by 1.8 points in the euro area.

Expectations of managers in the construction and services sectors have improved slightly as well, with the indicators in the EU going up by 0.5 and 0.2 points respectively. In the euro area, they grew 0.4 points each, shows the EC report.

Industry confidence was more or less unchanged.

Business managers plan to continue hiring, which is why the Employment Expectations Indicator increased further to 115.6 points in both regions (+1.4 and +1.7 points in the EU and euro area, respectively), despite marked uncertainty caused by persisting production bottlenecks due to the shortage of certain input components and raw materials, as well as a steep rise in COVID-infections.

For more, check out our dedicated business section.

November the 26th, 2021 - Croatian exporters are still dealing with concerns related to the ongoing coronavirus pandemic and the economic issues that it has created over the best part of the last two years.

As Poslovni Dnevnik/Ana Blaskovic writes, in a sea of ​​bad news which has been circulating since the outbreak of the coronavirus pandemic - restrictions, bottlenecks in supplies, energy spikes and the latest headaches due to inflation - there's also a bit of good news here and there. The euro slipped to its lowest value against the dollar since July last year, giving exporters dealing in the single currency a competitive advantage globally.

The effect unfortunately won't really spill over significantly to Croatian exporters and other domestic producers because the lion's share of foreign trade takes place in euros. However, good export trends could be disrupted by new ''lockdowns'' which have been reintroduced in some European countries, especially Austria and Germany.

The single currency lost about 8 percent of its value against the US dollar in one year. The decline reflects the fact that the European Union had to pay a very high price during a pandemic, from the initial confusion to public conflict over vaccines that have led to high death rates and blows to respective EU economies.

Despite the rapid recovery we've seen in recent months, markets continue to perceive relative lagging behind global players.

“Europe has a fundamental problem of reducing the trade surplus because it has two major challenges; rising energy prices and raw material vulnerabilities ”, explained Zeljko Lovrincevic from the Institute of Economics. The implementation of the Green Agenda, which is being firmly pushed by richer EU member states and is the backbone of EU policy, carries a high price for the poorer nations.

"Although the euro has weakened considerably, not only against the dollar but also against other currencies, trade has deteriorated as import prices have risen," Lovrincevic said, noting that EU producers ultimately didn't benefit too much from the currency's frequent weakening, and that's the situation for Croatia as well.

Eurostat figures clearly testify to the slowdown in the bloc's trade. The EU's trade surplus with the world fell to 4.8 billion euros back during the month of August this year, from 14 billion euros in the same month a year ago. In September, the total trade surplus fell to 7.3 billion euros, while in 2020 it amounted to 24.1 billion euros.

The weaker euro was also contributed by the position of the European Central Bank that the current inflation is only a temporary disturbance due to which it will not hurry with the raising of interest rates. ECB chief Christine Lagarde has made it clear that tightening monetary policy would "do more harm than good" and that it is "unlikely" that the conditions will be met next year either.

Consumer price growth accelerated to 4.1 percent in the Eurozone and 4.4 percent at the European Union level in October. In the conditions of a stable exchange rate, inflation in Croatia spills over through import prices, especially in regard to energy and food, and prices rose by 3.8 percent in October.

"For the EU, this means that inflation will not only be a short-term phenomenon, but that it will be present in the long run instead. This is a consequence of targeting monetary moves according to the needs of the weakest member states, so it is expected that the ECB will be the last to raise interest rates,'' it was explained.

Croatian exporters, who are often rumored to be the best part of the economy, will be more affected by accelerating prices in the business environment. The more inflation persists, the expectations for further growth are built into contracts on salaries, suppliers, pensions… The first test of whether an inflation clause will be arrived to in this country will be the current negotiations between the state and public sector unions on a new collective agreement. If the unions do succeed in breaking the ice, the others will go the same way too.

Local producers will thus not benefit from a weaker euro as they are firmly tied to exports to the European Union; exports to other member states make up about 70 percent of the total value of exports, while a significant part of exports to EFTA and CEFTA countries are realised solely in euros, they stated from the Croatian Chamber of Commerce (HGK).

They added that in the global market over more recent years there have been significant oscillations in the movement of the euro against other currencies, so when contracting new export transactions it is not possible to be guided by the current depreciation trends.In addition, it should be emphasised that regardless of the current trend of the weakening of the euro, its average value against the dollar (and thus against currencies linked to the dollar) and the Swiss franc in the first ten months of this year was higher than in the same period last year.

There is now an immediate problem placed at the door of European and Croatian exporters - new ''lockdowns'' that were eagerly rejected by politics until recently, but which have been reintroduced by some nations. "The introduction of new covid restrictions in several Eurozone member states will certainly have additional adverse effects on the economy of the Eurozone, to which the majority of Croatian exports are tied. This isn't good news for Croatian exporters and producers at all, especially since the Eurozone trade surplus to the rest of the world decreased significantly in 2021 compared to what we saw in 2020, and Croatian exporters depend on the likes of Germany and other Eurozone members, so their economic weakening means and lower potential for our export placement and Croatian GDP growth,'' explained worried Croatian exporters.

For more, check out our business section.

November the 24th, 2021 - The end of October this year saw 1.58 million officially employed Croatian residents as the domestic economy continues to grow steadily as we emerge delicately from the global pandemic.

The rocky situation with the global economy has made sure that no country could easily escape the dire economic consequences that this truly unprecedented situation has caused, and countries like Croatia, which relies very heavily on tourism, took a very heavy blow indeed. It seems however, that things are on the up.

As Poslovni Dnevnik writes, at the end of October this year, there were 1.58 million officially employed Croatian residents, which is 0.2 percent more than in September and two percent more than in October last year, while the registered unemployment rate in October stood at 7.2 percent, which is an increase by 0.2 percentage points on a monthly level, according to the Central Bureau of Statistics (CBS).

According to the CBS, there were 1,581,743 officially Croatian residents during the month of October, which is 3,599 or 0.2 percent more than at the end of September this year. At the annual level, the number of total employees in the country increased by two percent.

1,368,324 persons were employed within legal entities, which is 11,746 persons or 0.9 percent more than a month before. Compared to the same month last year, this growth was stronger and amounted to 1.8 percent.

According to the data that the CBS takes from the records of the Croatian Pension Insurance Institute, there were 194,810 employees in crafts and trades at the end of October, which is 8,165 or four percent less than in September 2021. At the annual level, the number of officially employed Croatian residents in crafts and trades was higher by four percent.

More detailed statistics on the number of employees in legal entities show an increase on a monthly basis in most activities, with the largest increase in the number of employees in the education sector, by 8.2 percent, to 121,331 persons.

For more on working in Croatia, and employment, make sure to check out our dedicated lifestyle section.