ZAGREB, 11 March, 2021 - After a slight drop on Wednesday, the Zagreb Stock Exchange (ZSE) Crobex index rebounded on Thursday, increasing by 0.12% to 1,864.90 points, while the Crobex10 continued its upward movement for the fourth day in a row, closing up 0.25% at 1,166.04 points.

Turnover at the close of the trading session reached HRK 7.3 million, about 2 million less than on Wednesday.

The highest turnover, of HRK 2.25 million, was generated by the stock of the HT telecommunications company. It closed at HRK 192 per share, up 2.13%, its highest price since June 2013 when it closed at slightly over HRK 200 per share.

The only other stock to pass the turnover mark of one million kuna was plastic car parts manufacturer AD Plastik, turning over HRK 1.2 million. It ended the day at HRK 185.50 per share, up 0.27%.

A total of 44 stocks traded today, with 18 of them recording share price increases, eight registering price decreases and 18 stagnating in price.

(€1 = HRK 7.582776)

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ZAGREB, 6 March, 2021 - Croatia's 2030 employment target is to have 75% of adults in work, and currently only two thirds  (66%) of the adult population are employed, the Večernji List daily reported on Saturday.

The current Portuguese presidency of the Council of the European Union is organising a summit meeting on social affairs in May, and the EU is supposed to endorse new goals in this sector which should be accomplished until the end of this decade.

One of the goals is that at least 78 of 100 people aged 20 to 64 should be in employment by the end of this decade.

Three of four Croats aged between 20-64 to be employed

It is up to each member state to define its targets, and Zagreb plans to have three fifths people in the 20-64 age cohort in employment until 2030. For this target to be met, the country should create new 200,000 jobs in the coming years.

Currently, only Greece and Italy fare worse than Croatia in this regard, where only three fifths of adults (60%) are employed.

Sweden tops the EU ranking with 82 out of 100 adults being employed, and Germany follows with 80%.

ZAGREB, 5 March, 2021 - The main Zagreb Stock Exchange (ZSE) indices fell on Friday amid a slightly higher turnover than the previous day, with the Crobex dropping by 0.85% to 1,829 and the Crobex10 by 0.52% to 1,139.

Week-on-week, the Crobex slid by 0.2%, while the Crobex10 increased by 0.63%.

All sectoral indices finished the day in the red, with the tourism index showing the biggest decline, of 1.35%.

Today's regular turnover was HRK 5.7 million, or HRK 1.7 million more than on Thursday.

The stock of the HT telecommunications company was the only one to cross the one million kuna mark, and it generated a turnover of slightly more than HRK 2 million. Its price went up by 1.1% to HRK 183 per share.

The company today said that a meeting of the Supervisory Board would be held on Tuesday, 9 March, when annual financial reports and the proposal for the use of profit for 2020 would be determined, and on Wednesday the revised financial reports the proposal for the use of profit would be published.

The stock of the Valamar Riviera tourism company turned over HRK 773,000, its price dropping by 2.62% to HRK 29.7 per share.

Thirty-eight stocks traded today, with 10 of them registering share price increases, 22 recording price decreases and sixremaining stable in price.

(€1 = 7.576668)

ZAGREB, 5 March, 2021 - A total of 3,439 new passenger cars were sold in Croatia in February 2021, 4.2% fewer than in the same month in 2020, according to the data released by the Promocija Plus market research agency on Friday.

In January 2021, 2,915 new cars were sold, a decrease of 19.7% compared with January 2020. The January drop affected cumulative data for the first two months of 2021, when a total of 6,345 vehicles were sold, or 12.95% fewer than in January-February 2020.

In the first two months of this year the best-selling car make was Volkswagen, with 1,187 units sold and a market share of 18.68%. The only other carmaker with a market share exceeding 10% was Škoda, with 823 cars sold in the January-February period and a market share of 12.95%.

Fiat was third with 482 cars sold, followed by Dacia and Hyundai, with 328 units sold each, and Renault with 327 vehicles sold.

In February alone, the most sought-after car model was the Škoda Octavia, with 227 units sold, ahead of the Fiat Panda (215), the VW T-Roc (150), the Dacia Duster (138) and the Hyundai Tucson (126).

In January and February, 3,271 petrol cars were sold, accounting for 51.5% of total sales, while diesel vehicles accounted for 31.3% with 1,986 units sold. Also sold were 830 hybrid cars (13.1%), 193 vehicles powered by natural gas (3%) and 74 electric cars (1.2%).

ZAGREB, 4 March, 2021 - The Zagreb Stock Exchange Crobex index increased 0.07% to 1,845 points on Thursday, while the Crobex10 decreased 0.07% to 1,145 points, with a regular turnover of just under HRK 4 million.

No stock crossed the million kuna mark. The most traded stock was the Podravka food company, turning over HRK 786,000. It closed at HRK 518 per share, up 0.39%.

Forty-one stocks traded today, 16 ending with share price increases, 17 with share price decreases and eight ending stable.

(€1 = HRK 7.573946)

ZAGREB, 4 March, 2021 - At the November of 2020, Croatia's public debt totalled HRK 327.8 billion, rising by 35.3 billion, or 12.1%, from the end of 2019, and the country's public debt-to-GDP ratio increased by 15.3 percentage points to 88.6%, according to the Croatian National Bank (HNB) data.

Month on month, the public debt increased 0.6% at the end of November 2020.

A strong rise in the public debt in the first eleven months in 2020 is a result of the response to the crisis caused by the global COVID-19 pandemic, which reduced a large number of economic activities and consequently budget revenues while the state stepped in to cover a budget gap, according to assessments made by RBA bank's analysts.

The analysts also expect the reduction of the debt-to GDP ratio in 2021 below 85%, provided that economic recovery forecasts come true in the course of this year.

(€= HRK 7.5)

ZAGREB, 3 March, 2021 - Amid a quiet trading day on the Zagreb Stock Exchange on Wednesday, the main indices increased mildly, the Crobex by 0.17% to 1,844 points and the Crobex10 rising by 0.06% to 1,146 points.

Regular turnover amounted to a modest HRK 4.68 million or about HRK 200,000 less than on Tuesday.

Not one stock crossed the million kuna mark.

The biggest turnover of HRK 843,000 was generated by the Podravka food producer. The price of Podravka shares increased by 1.18% to close at HRK 516 per share.

(€1 = HRK 7.571693)

ZAGREB, 25 February, 2021 - Expectations for the Croatian economy increased in February to the highest level since March 2020 reflecting the wave of optimism in the services and retail sectors, as business leaders signalled a lower demand for workers, a European Commission report showed on Thursday.

In February, the Economic Sentiment Indicator (ESI) was 94.1 points, or 3.9 points higher than in January, which was its highest level since March 2020 and the outbreak of the coronavirus pandemic. Its value, however, is below the long term average of 100 points.

The greatest improvement was observed in services confidence, increasing by 6.5 points. Retail and industry confidence improved significantly, by 4.8 and 3.3 points respectively, reaching their highest level since March 2020. A mild improvement was registered in construction confidence and in consumer confidence, up 1.7 and 1.6 points month on month.

Business leaders, however, signalled a decline in the need for workers in the coming period, with this index falling to 90.3 points or by 3.4 points m-o-m, which is its lowest level since June last year.

Slight improvement in EU and euro area

Economic sentiment in the EU and the euro area in February registered a mild growth of 1.9 points to 93.1 and 93.4 points respectively, the EC said in its report.

The highest increase in the EU and euro area was in industry confidence, of 2.4 points in the EU and 2.8 points in the euro area.

Services confidence improved by 1.1 points in the EU and by 0.6 points in the euro area.

The slightest improvement was observed in consumer confidence - 0.8 points in the EU and 0.7 points in the euro area while construction confidence remained unchanged compared to January.

Retail confidence deteriorated, with the index falling by 0.5 points in the EU and by 0.6 points in the euro area.

Business leaders expect that they might step up hiring in the coming period so the Employment Expectations Indicator (EEI) increased by 1.7 points in the EU and by 1.8 points in the euro area, the EC report showed.

December 19, 2020 – A surprising success story in a difficult year as Croatia agriculture and food exports jump in 2020, while imports of the same have fallen

Good news from any place is welcome in this most difficult of years. According to provisional data from the country's Central Bureau of Statistics, the total value of Croatia agriculture and food exports in the period from January to September 2020 amounted to 1.7 billion Euros, an increase of 5 percent from the same period in 2019. Within the same period, the value of agricultural and food imports into Croatia was 2.5 billion Euros, a decline of 7.3 percent from last year.

The success of Croatia agriculture and food exports in the period means that the country's trade deficit has decreased by huge 26.6 percent compared to the same period last year. With this year's findings taken into account, the trade deficit now stands at 758.8 million Euros.

© Romulić & Stojčić

Croatia agriculture and food exports covered 69 percent of total imports this year, an increase of 8.11 percent. A total of 15.86 percent of all exports from the country come from the Croatia agriculture and food exports sector.

The most important item of production within the sector is corn, which accounts for 5.4 percent of all Croatia agriculture and food exports.

From January to September 2020, the most significant products in exports were: cereals (205.4 million Euros – a growth of a huge 62.6 million Euros); various food products (168.1 million Euros – including manufactured/processed foods like sauces, soups, ice cream, sugar products); fish and other seafood (a huge 147.4 million Euros – showing a growth of 14.5 million Euros); cereals, flour, starch or milk products; confectionery products, including chocolate (135.9 million Euros – a growth of 13.8 million Euros), and tobacco-related products (122.6 million Euros). TCN recently took a closer look at the successful and well-established Croatian chocolate industry

Other successes within 2020 Croatia agriculture and food exports were live animals, with an increase of 10.1 million Euros, and the residue and waste of the food industry, which is exported to go into prepared animal foods. The latter saw an increase of 8.6 million Euros.

So far this year, Italy was one of the most important destinations for Croatia agriculture and food exports. Their total consumption of Croatia agriculture and food exports was 300.8 million Euros, which amounts to 17.76 percent of Croatia's exports in the sector. Croatia agriculture and food exports to Italy increased by 21.9 percent this year, while imports from Italy to Croatia in the same period was 263 million Euros, a decrease of 16.6 percent on 2019. This creates a surplus of 37.6 million Euros.

The most important Croatia agriculture and food exports to Italy are maize, wheat and soybeans, tobacco-related products, sea bass (brancin) and bream (orada).

For the last five years, Croatia agriculture and food exports top consumer has been Germany. For the past seven years, Germany has also been the country from which Croatia has imported the most.

ZAGREB, Dec 19, 2020 - The outgoing year 2020, which was supposed to have been a year of continued economic growth, has turned into a year marked by the COVID 19 pandemic that has tested the strength of public finances.

At the very beginning, 2020 seemed to be similar to the previous five or six years: nine laws regulating tax changes ushered in the fourth round of a tax reform which shouldincrease the post-tax disposable income by HRK 2.4 billion. The ordinary pace of the social and economic activities continued against a background of more and more information about the spread of the coronavirus infection in China.

25 February - 1st registered case of coronavirus infection in Croatia

On 25 February, Croatia's health authorities reported that they had confirmed the first case of the infection with the novel virus in the country. Immediately after that, citizens rushed to stores to buy large quantities of food and hygienic products. Traffic across borders was also made more difficult due to a high number of passengers going back home and stringent controls at border crossings.

On 12 March, Prime Minister Andrej Plenkovic announced first anti-COVID restrictive measures and reassured the enterprise sector that compensatory measures for businesses were being hammered out. The PM put an emphasis on the retention of jobs.

In mid-March, the Croatian National Bank (HNB) assessed that the earlier forecasts of economic growth would have to be revised, and for the first time in its history the central bank purchased state bonds in the amount of 213 million kuna.

HNB-ECB swap line deal, 1st set of measures to offset lockdown damage to economy

In March, the HNB conducted five interventions on the foreign exchange market to maintain the stability of the exchange rate of the kuna, selling a total of € 2.25 billion. Since then, it has also taken some other measures to mitigate the economic impact of the coronavirus pandemic. The HNB also released HRK 3.8 billion to banks in a structural operation and HRK 1.85 billion in regular ones in that period.

In mid-April, the HNB said it had agreed with the European Central Bank (ECB) to set up a precautionary currency agreement, known as a swap line, that will allow the HNB to borrow up to €2 billion from the ECB in exchange for Croatian kuna. The HNB said in a press release that the precautionary currency swap line would be activated if needed.

This swap line gives the HNB "the space to provide additional euro liquidity to Croatian financial institutions, should they need it, without using its own international reserves."

The central bank said that it "will notify the ECB of the use of euro liquidity acquired through the currency swap line. The currency swap line will remain in place until 31 December 2020, and can be extended if necessary."

In the second half of March, public events and gatherings were cancelled, and the government and the parliament adopted the first HRK 30 billion-worth set of compensatory schemes, with the aim of retaining jobs and ensuring funds for wages. The government also financed a minimum net monthly wage of HRK 3,250. The first package, worth HRK 30 billion (€4bn), included 63 measures aimed at those that were already feeling or were yet to feel the consequences of the crisis.

Lockdown and earthquake

Croatia went into a lockdown on 19 March and on 22 March, Zagreb and its environs were hit by an earthquake with a magnitude of 5.5 on the Richter scale which kille a teenage girl in downtown Zagreb and caused serious material damage, estimated at HRK 42 billion, in the city and nearby counties. Currently, 12 billion kuna has been made available for the reconstruction as an initial fund coming from the EU Solidarity Fund plus a US$ 200 million loan provided by the World Bank.

The fund for the post-earthquake reconstruction of Zagreb and two neighbouring counties has been established in the meantime, with renowned manager Damir Vandjelic at its helm. He has said that the total revenues of the construction sector in Croatia in 2019 came to 18 billion kuna, whereas the activities in the reconstruction of quake-damaged buildings would bring 3-4 billion kuna annually.

2nd set of compensatory measures 

In April, the government introduced the second rescue package to save jobs and help the economy, including increasing the net minimum wage to HRK 4,000 (€725). In total, the state was expected to pay HRK 5,460 per employee as a furlough measure in April, May and June. The state funded the measure with HRK 8.5 billion.

Secondly, the government partly or fully exempted some businesses from taxes for April, May, and July (12 billion kuna).

The third measure in this package applied to VAT payments, making possible for companies to defer such payments until the billing of invoices issued.

In mid-April, the Croatian parliament unanimously (with 120 votes 'for') adopted the government-sponsored law under which the enforcement of monetary assets of natural persons would be suspended for a period of three months, and if necessary for an additional three months.

Throughout May, the epidemic ebbed away, and 23 May was the first day since the outbreak of the infection without any new case of coronavirus.

The favourable circumstances enabled the gradual ease of the restrictions and reopening of non-essential shops and hospitality services.

In late June, Croatia adopted a short-time work scheme as one of the measures to help the businesses affected by the corona crisis.

Tourist season, parliamentary elections

Two summer months, July and August, were marked by the 5 July parliamentary elections, with the Croatian Democratic Union (HDZ) being a relative winner. After that, it and its junior partners formed the new government, the second cabinet led by Prime Minister Andrej Plenkovic.

During the peak summer season, more and more tourists travelled to Croatia. The data for the first nine months of 2020 show that 6.6 million visitors were in Croatia in that period, making 39.7 million overnight stays, or 63.4% fewer travellers and 54% fewer overnight stays compared to January-September 2019.

Coronavirus 'second wave' 

In September, the government unveiled a new rescue package witch also included COVID loans to improve the liquidity of companies in distress due to the corona crisis.

The government adopted budget guidelines for the next three years, which project a 8% GDP drop this year, a 5% growth in 2021, a 3.4% growth in 2022 and a 3.1% growth in 2023.

This year, the budget gap is expected at 6.7% of GDP, while in 2021 it should be reduced to 2.9%, which is within the Maastricht criteria, the government said when unveiling the guidelines in late September.

With the deterioration of the epidemic in November and in the first half of December, the government continued providing assistance through a job-retention scheme and other measures.

However, the dissatisfaction of the worst affected businesses, notably enterprises in the transport and hospitality sectors, was growing. As a result, apart from the HUP, HGK and HOK business associations, one more association -- the Voice of Entrepreneurs ("Glas Poduzetnika") -- was set up, bringing together disgruntled businesses.

In mid-December, Prime Minister Andrej Plenkovic said that Croatia was now facing a challenging period in the coronavirus epidemic which has cost Croatia HRK 30 billion so far and that the human casualties and the high number of people infected call for new measures.

The Prime Minister underscored that since the outbreak of the epidemic the government has spent HRK 30 billion through various activities to maintain a normal life and to enable the health system to continue functioning.

ERM II and journey to euro area, OCED membership

2020 would be also remembered for Croatia's admission to the Exchange Rate Mechanism (ERM II) in July.

The European Central Bank (ECB) and the European Commission announced on 13 July that Croatia had been admitted to ERM II, the key step in the process of adopting the euro, and that the Croatian National Bank (HNB) had established close cooperation with the ECB. Croatia now faces the job of meeting the Maastricht criteria in the next two years.

In mid-December, Plenkovic said that the coronavirus crisis had once again shown the importance of Croatia's membership bid to join the Organisation for Economic Cooperation and Development (OECD), which continued to be one of the government's priorities. The Croatian government sent a formal membership request to the OECD in January 2017 and since then it has candidate status. The decision on accepting it as a member has to be unanimously adopted by the OECD Council after which the accession process begins.

EU's Multiannual Financial Framework, €22 bn to be made availabe to Croatia

The corona crisis has also tested the institutions of the European Union and its response to the new circumstances. The most important event in this context is the July agreement of the European Council on the new Multiannual Financial Framework  (MFF), including a €750 billion recovery fund.

Of the €1.8 trillion long-term EU budget, approved in mid-December by the European Parliament, Croatia should receive a total of €22 billion from those sources.

The Next Generation EU plan was adopted in synergy with the MFF 2021-2027, and it should repair the economic and social damage caused by the coronavirus pandemic, kick-start European recovery and protect and create jobs. Slightly over €12.6 billion from the new MFF and €10.6 billion from the Next Generation EU instrument will be available to Croatia.

Credit rating agencies' assessment 

In mid-November, the Moody's credit rating agency upgraded Croatia's rating to Ba1 from Ba2 and changed the outlook to stable from positive, citing enhanced institutional capacity and policymaking as the country enters a critical phase of euro area accession and reduced exposure to foreign-currency debt risk.

Two other major credit rating agencies, Standard & Poor's and Fitch, keep Croatia's credit rating at investment grade. S&P affirmed its rating of 'BBB-/A-3' with a stable outlook in September.

On 5 December, Fitch Ratings affirmed Croatia's long-term foreign-currency issuer default rating (IDR) at BBB-, assessing the outlook as stable and noting that it expects gradual recovery from the coronavirus crisis with the help of EU funds as well as that limited capacity to absorb EU money poses a problem.

(€1 = HRK 7.5)