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.

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October the 26th, 2021 - Numerous Croatian IT companies, as well as several from other sectors, including food and construction, are among the most interested in working with the Turks.

As Poslovni Dnevnik/Marija Brnic writes, the fact that Turkey is an increasingly important economic partner for Croatia has been well and truly confirmed by the data which shows that more than 700 companies are participating in the latest cycle of B2B talks that are being held with Turkey as part of the Croatian Chamber of Commerce's Go Global - Go Virtual project. The talks will run until October the 29th, 2021, and so far 543 companies from Croatia and 161 from Turkey have been involved.

The structure of interested companies that are looking for partners for cooperation is interesting, because the largest number, every seventh, comes from the Croatian IT sector, food and beverage production, and the construction sector, in which companies from the two countries have been cooperating.

About 60 companies come from the production of machinery and equipment, and the metal industry. About 50 companies dealing with automation and robotics, as well as electronics, are also discussing cooperation, but all other production sectors, as well as services, from consulting to tourism, are also quite strongly represented.

There are slightly less than 29 domestic enterprises interested in cooperation in the field of waste and recycling, and this interest is interesting because over more recent years this activity has raised Croatian exports to Turkey to absolute record levels.

This year, more precisely in the first seven months of it, exports almost reached the total realisation from last year, which was also a record export year on the Turkish market, in which a total of 183 million euros worth of goods were placed even in the conditions of the ongoing global coronavirus pandemic.

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June the 12th, 2021 - Croatian export results are looking promising so far this year, with the first four months of 2021's results overtaking those from pre-pandemic 2019. It's no surprise that the pharmaceutical industry has done exceptionally well.

As Poslovni Dnevnik/Marija Brnic writes, it was expected that Croatian export results would be higher in March and April than they were last year, when the economy in all major markets stopped due to the lockdown and trade flows were interrupted. However, the latest preliminary data from official statistics show something unexpected - that a record export year has begun in Croatia.

In the first four months of 2021, Croatian producers placed 5.5 billion euros' worth of products on foreign markets, which is more, even on an annual level, than was achieved in the hitherto record 2019 export year. At that time, the cumulative Croatian export results in those four months was 4.9 billion euros. Last year, 4.6 billion euros were exported in the first four months.

When it comes to precisely which sector of production and which markets deserve the most credit for this step forward, more can be read from more detailed data that will be published by the Central Bureau of Statistics in around one month, but from that data processed for the first quarter of 2021, it can be inferred that pharmaceutical production, unsurprisingly given the public health crisis, did the best.

Their results in the first quarter was as much as one third better than they were last year, and double-digit growth rates were also recorded by wood processors, the agriculture sector, exporters of electrical equipment, rubber and plastic products, and the metal industry. In fact, it is simpler to list those who had a negative export score - the textile, automotive, shipbuilding, chemical and refined petroleum sectors/products.

INA's crude oil, which even before the coronavirus pandemic began being exported to Hungary for processing in the MOL refineries, should be added to the previous list of exporters who have made great strides forward, thanks to which Hungary has entered the ranks of the most important Croatian export markets.

According to state statisticians, Italy has regained its leading position on the Croatian export list, which it lost during the pandemic, and is again ahead of Germany after one year.

In the first three months of 2021, 22.5 percent more was exported to Italy than in the same period last year, a total of 520 million euros, about 8 million euros more than to Germany, which also recorded a better export result (5.5%). In total, the Croatian economy exported goods worth 4 billion euros in the first quarter of this year (8.6% more than it did in the first quarter of 2019).

For the first time in a long time, exports to Austria also increased, and among EU member states, when compared to last year, producers had a weaker result only with sales to Belgium, Luxembourg, Estonia, Portugal and Romania.

An increase in exports and as such Croatian export results was also finally realised on the neighbouring market of Bosnia and Herzegovina, although the country was overtaken by Hungary for the first time, thanks to INA and MOL.

Croatia's 72 percent annual growth in Croatian exports is also interesting because at the EU level, exports to the United States had a negative trend in the first quarter, falling by 4.5%, reflecting trade tensions and tariffs imposed by the transatlantic partners during the former Donald Trump administration.

Pliva and the Karlovac arms manufacturer HS Produkt contributed the most to the growth of exports to the USA. If we compare the statistical indicators, the record year for Croatian exporters was 2019, this year in the first three months 158 million euros were exported, but at the same time, back in pre-pandemic 2019, the result was as much as 192 million euros.

This slow but steady global recovery will also contribute to the good trend in the placement of Croatian goods on international markets, especially in the Eurozone, where Croatia's most important foreign trade partners come from.

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