27 Croatian companies are also part of the historic Chinese international import fair.

As Marija Brnic/Poslovni Dnevnik writes on the 6th of November, 2018, China will continue to open its market for foreign products and cut import tariffs, this was the main message from China's President Xia Jinping at the opening of China's first international import-export fair entitled China International Import Expo (CIIE), an event which has already been rated historic and whose opening in Shanghai was attended by the leading people of fourteen countries, including Croatian Prime Minister Andrej Plenković.

More than 3,000 companies from 130 countries worldwide participate in this large gathering, and within the CIIE, the Croatian-Chinese Economic Forum will be held today, which will include 27 Croatian companies interested in entering into business cooperation with numerous Chinese partners.

Some of the companies have already established excellent market connections that include more than 1.4 billion people, such as Podravka, Badela 1862, and Pan Parket from Orahovica, which is the biggest advocate of turning Chinese customers towards the wood industry sector. Wood is also the main Croatian export product. In total, exports last year were worth a massive 126 million dollars. This year, exports to China are growing faster than they did in the previous record year, by as much as 44.5 percent.

PPS Galeković from Velika Gorica just outside of Zagreb is also representing the wood industry in Shanghai. Among the companies that want to enter the Chinese market are a significant number of smaller companies dealing with consulting, information projects and web design, such as Adricon Group, Mipesa, Provena, Gelt date, as well as a few industrialists - Meteor, a producer of detergents and chemical products from Đakovo in Slavonia, Kotka from Krapina, which specialises in the production of men's suits, and the well known Croatian special equipment producer, Lučko.

Partnership with Huawei?

Representatives of Luka (the port of) Ploče also attended the meeting, who, along with their counterparts from the port of Rijeka, which, during his speech on "Trade and Innovation", Plenković personally recommended to Asian companies operating in the European market. During the fair, the Croatian Prime Minister also had a working meeting with Huawei President for Europe, and Plenković stated that he expressed interest in intensifying cooperation and partnership with Croatia in the digital age.

In addition, the brand new Croatian Tourist Board (HTZ) office has been officially opened in Shanghai, with the aim of strengthening promotional activities on this market, from which Croatia continues to receive a growing number of visits. This year, Croatia will be visited by 250,000 Chinese tourists, which is a much higher figure than in previous years.

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Click here for the original article by Marija Brnic for Poslovni Dnevnik

Croatia is a paradoxical country in many senses, and that is a sentence that has been written many times over the years. Paradoxes can be seen across all spectrums of society, and when it comes to the Croatian economy, the paradoxes are enough to make one scratch ones head. 

You'll hear one (or more) of any of these things in relation to the Croatian economy: There are no jobs. There are jobs but the pay isn't enough. We can't find the staff. We're willing to give the staff good wages, food, accommodation and a decent amount of time off. We've got many jobs available but nobody wants to work. I can't find a job and I'll do anything... but not that (as Meatloaf might have said had he been searching for work in Croatia).

You get the point. Sadly it appears that this situation isn't one that is about to remedy itself anytime soon.

As Ljubica Gataric/VL/Poslovni Dnevnik writes on the 5th of November, 2018, migration can indeed go in both directions, but at the minute, Croatia's labour force is taking advantage of the EU's freedom of movement policy and heading abroad in search of better lives, better wages, more security and more opportunities, and only recently has the the import of workers from elsewhere to Croatia been discussed. But why would they come?

With the absence of young workers becoming an ever-increasing problem, domestic and foreign companies and institutions operating in the country are turning to the older population more and more to try to keep the Croatian economy afloat. The numbers are intractable and show that over the past ten years, Croatia has lost about 127,000 young people aged up to 29, corresponding to the population of an entire city, such as Rijeka.

Such a reduction in the number of young people has naturally seen the domestic labour market suffer, causing a dramatic shift in the age structure of employed workers. In ten years, which means long before Croatia joined the European Union, the number of employed persons in Croatia decreased by 122,419, measured by the number of insured persons registered in pension insurance, according to Vecernji list.

Most of this loss relates to the group of young workers aged up to 29 years, of whom there were 104,000 less employed at the end of 2017 than when compared to a decade ago, in 2007.

The remaining deficiency for the Croatian economy is in the next age group of workers aged between 30 and 34 years.

After the Croatian economy emerged from the recession, four years ago, the total number of insured persons increased by 95,000 to approximately 1.45 million. But, as Darko Orčić, an analyst at the Employment Service, recalls, the number of employees in the age group of 25 to 34 is still very much declining.

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Click here for the original article by Ljubica Gataric/VL on Poslovni Dnevnik

The trends appear to show that people in Croatia are borrowing more and more credit, mainly for housing and cash loans.

The monthly value of newly approved loans in the housing sector shows greater dynamics in terms of the credit activity of banks in this sector when compared to last year, as has been reported from the Croatian Chamber of Commerce (HGK).

As Poslovni Dnevnik writes on the 3rd of November, 2018, in the first nine months of 2018, when looked at in the sense of a year-on-year comparison, the gross value of newly approved loans in this sector was 2.9 percent higher.

The gross value of newly approved loans at an annual level during 2018's first nine months increased only in the housing sector and in loans for other purposes, while the value of newly approved revolving loans, overdrafts, credit from credit cards and consumer credits was lower than in it was during the same period last year.

The largest value of credit institution credit to the population in kuna this year is for credit on credit cards and for overdrafts on transaction accounts. Of the newly approved kuna loans with currency clauses, the highest value appears to be in regard to loans for other purposes, followed by housing loans. This can typically be looked at as housing and cash loans.

In line with the dynamics of the growth of new loans, at the end of September this year, the value of the household sector's debt increased by 3.9 percent to 122.6 billion kuna (up from December 2015). The household sector is currently the most heavily dependent on housing loans (43.2 percent of total debt) and non-purpose loans (37 percent of total debt).

The annual growth rate of total household loans has been being realised for as many as thirteen consecutive months, and interest rates on loans in this sector are at record low levels and appear to be continuing to move downward. As a result, interest rates on ''pure'' kuna loans in some sectors fell below kuna loans with a currency clause. This is the case with revolving loans and, for the very first time, with housing loans.

For the first few months, the population has been more borrowing kuna loans than kuna loans with currency clauses. The upcoming period is expected to continue the dynamics of this type of credit activity in banks towards the population in the context of real wage growth and employment.

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Croatian fishermen will have their lives and their work made much easier owing to the approval of exemptions for fishing with certain traditional methods, including the use of tow nets, which were formerly banned upon Croatia's entry into the European Union.

As Morski writes on the 2nd of November, 2018, according to the Official Gazette of the European Union, the derogations which Croatia applied for, which provide for exemptions from the provisions of the EU's Mediterranean Decree for Croatian fishermen operating in Croatian waters, have finally been officially approved.

With the publishing these documents, a multi-annual process, during which the Republic of Croatia applied for exemption from the provisions of the Mediterranean Decree, which prevented the use of certain fishing tools in a traditional way, has been completed, reported the Ministry of Agriculture.

This very welcome outcome was preceded by scientific research and the collection of arguments for exemptions for Croatian fishermen which were formulated in a management plan. These management plans, together with the derogations, were actually approved over the winter, but only with the publication of the implementing of these regulations does it become possible to implement them effectively into national legislation.

Fishing will take place according to the strict rules that had to be met, and continue to need to be met for the approval of the desired derogations. This move will not lead to an increase in fishing in general, nor will it negatively impact or cause any additional threat to coastal resources, habitats, or certain species of fish, but it will ensure the continuation of fishing with the use of former methods, in the manner and to the extent at which it stood before Croatia's accession to the EU.

Although the process of obtaining these derogations for Croatian fishermen was an extremely complex process in itself, this much anticipated outcome once again enables the legal work of more than 100 fishing vessels which do use fishing nets. It also enables the retaining of traditional fishing gear and fishing methods which have been present on the Croatian part of the Adriatic sea for decades. Their recognition in European Union legislation will now become official.

''Those who know the fishing [industry] know how much work has gone into obtaining these exemptions and how much harmony and cooperation was needed for us to fight for our traditions, our heritage, and our lifestyle. This is the best example of how strong we are together and how much we care about preserving our values. This outcome is down to everyone who has been working on it for years,'' stated Deputy Prime Minister and Minister of Agriculture Tomislav Tolušić.

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Croatian Telecom rides on the back of a good tourist season as their profitability continues to grow.

As Bernard Ivezic/Poslovni Dnevnik writes on the 1st of November, 2018, an excellent and highly successful summer is now behind Croatian Telecom. The communications company can now freely boast of its significant increase in profitability, as well as a change in the revenue structure which also aided the increases.

The widely used operator, which has the most liquid share of all on the Zagreb Stock Exchange, concluded that its net profits rose from 19.1 percent to 864 million kuna, or 18.6 percent to 872 million kuna in the first nine months of this year alone, when the the non-controlling share is also accounted for.

More importantly, Croatian Telecom's operating profits grew by 6.5 percent compared to the same period last year, to a massive 2.39 billion kuna. This also means that the operating margin has risen to 41.9 percent from last year's recorded 38.8 percent. The only indicator that continues to stagnate is the company's revenue. Croatian Telecom's total revenue for the first nine months of 2018 fell by 0.1 percent to 5 billion kuna and 897 million as a direct result of a good tourist season.

Although operators have been somewhat negatively affected by the abolition of mobile roaming this season, Croatian Telecom has seen its revenues slightly increase in the third quarter, from 2.15 billion kuna last year to 2.16 billion kuna this year. Profits gained before tax has also increased, from 388.4 million kuna last year to 516.3 million kuna this year.

When it comes to alterations within the revenue structure, the main news is that Croatian Telecom has started to rely more on mobile telecommunications again. In the first nine months of last year, fixed telecommunication within the company was stronger than mobile communications by nearly a quarter of a billion kuna. This year, mobile communications grew by 5.3 percent to 2.61 billion kuna, while fixed communication fell 4.7 percent to 2.57 billion kuna.

Croatian Telecom states they have invested up to 1.24 billion kuna in the modernisation of both fixed and mobile infrastructure.

Davor Tomašković, Croatian Telecoms's Chairman of the Board, praised the fact that they have now achieved their best results in the past five years.

"During the first nine months [of 2018], we've achieved excellent results, and according to the growth of all key financial indicators, it is one of the best quarters for Croatian Telecom in the last five years," concluded Tomašković.

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Click here for the original article by Bernard Ivezic for Poslovni Dnevnik

Despite Agrokor's many woes, things appear to be on the up owing to the extraordinary administration under government appointed commissioner, Fabris Peruško. Peruško has managed to dig the former biggest privately owned company in Croatia out of a very deep and very dark hole, and removed its threat to the domestic economy. Expectations are for Agrokor to finally return to normality next year.

As Marina Sunjerga/VL/Poslovni Dnevnik writes on the 2nd of November, 2018, the company's consolidated report shows that Ledo enjoyed 100 million kuna higher revenue than in it did during the same period last year.

Agrokor's biggest companies appear to have had a good nine months, as the consolidated results show significant increases in the profitability of Agrokor's Jamnica, Ledo and Zvijezda, and a jump in the profits of thecompany's  most prominent partners, including Atlantic Grupa, Kraš and the legendary Podravka. Of course, while this is obviously positive news, Agrokor's results should be taken with a dose of reserve as well as satisfaction, as they're still very much under the protection of insolvency proceedings, meaning that loans and debts aren't being paid for.

The great news however, is that Jamnica and Ledo, who both operate under the Agrokor Group's umbrella, earned a massive four billion kuna in revenue at the end of the main tourist season, which is typically the period in which the aforementioned companies make the best money.

Jamnica earned a but more than two billion kuna in revenue, which means that sales, at least in comparison to last year, fell pretty sharply.

The company explained that its revenue was affected by the abandonment of part of its less profitable assortment as a result of a strategic decision to optimise the company's sales portfolio. The consolidated report shows a net profit of nearly 250 million kuna, which is 16 million kuna higher than last year's recorded result, but based on a decline in value-based expense. Ledo on the other hand, enjoyed somewhat better results, and the company's revenues and net profits have also grown significantly.

The aforementioned consolidated report shows that Ledo enjoyed 100 million kuna more revenue than it did during the same period last year, and earned 379 million kuna, which is a massive 75 million more than last year.

A net profit jump of an entire 25 percent is unarguably very positive news for the company's future.

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Click here for the original article by Marina Sunjerga/VL on Poslovni Dnevnik

Money isn't something most people are usually that willing to openly discuss, but there are times when one needs to look at the situation and see what can be improved. Who better to do that than the tax administration?

As Poslovni Dnevnik writes on the 1st of November, 2018, while these figures don't reveal the amount of people in Croatia working ''on the black'', according to the tax administration's data reveal, more than half of the country's registered employees, all 847,750 of them, are grouped into categories with monthly net wages of 2,500 to 5,500 kuna.

According to the information provided, the average monthly net wage per person in employment in legal entities in the Republic of Croatia for August 2018 was 6,264 kuna, which is nominally 0.9 percent more than it was in comparison with just one month previously, in July 2018, the Central Bureau of Statistics reported.

The question of just how many people actually do receive this so-called average salary is a pressing one, and the data from the country's tax administration for the past year has now revealed the answer. They published a table of employee structures in 32 categories of net income for the year 2017.

A net salary of between 6,001 to 6,500 kuna seems to be being received by a total of 86,985 people in Croatia, out of a total of 1,592,215 registered employees across the country, according to a report from Novi list.

The tax administration reports that as many as 1,166,731 employees are receiving a salary lower than the average, and as a result of that, more than half of the country's employees, 847,750 of them, are grouped into categories with monthly net wages of 2,500 to 5,500 kuna.

It appears from the provided data that less than 300,000 employees in the entire country have ''take home'' net salaries in the amount of 9,001 to 14,000 kuna per month.

As far as very high salaries are concerned, 269 employees take home more than 100,000 kuna per month, 921 salaries are between 50,001 to 100,000 kuna, and just 789 are from 40,001 to 50,000 kuna per month.

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Doing business in Croatia is always a hot topic, especially when it comes to listing the long list of negative experiences people have endured and hoops they have had to jump through in order to get a basic task done. While this isn't always the case, it's certainly the rule more than it is the exception, but just when will Croatia learn that the ease of doing business is far more likely to attract potential investors than natural beauty is?

As Ana Blaskovic/Poslovni Dnevnik writes on the 1st of November, 2018, not much has come from the grandiose announcements made by Andrej Plenković earlier this year that 2018 will be the year of reforms for Croatia. 

Many people will simply make such a statement for the sake of making it, to keep up the tradition of disliking politicians and the political system, or simply as a protest against the current prime minister, but despite all of the above, this isn't a malignant interpretation, but a concerning one stated on the Doing Business World Bank scale. Croatia held 51st place last year when it came to the ease of doing business, but in 2018, Croatia returned to 58th place among 190 countries across the world.

The year of reforms indeed.

Discussions about methodology and criteria when it comes to doing business in Croatia can of course be debated and argued over, but they are the same for everyone and whatever conclusion one may arrive to, ultimately, nothing can change the fact that the number on the aforementioned scale is an unfavouravle one, and such scales are a very important tool when it comes to investors deciding whether or not to bring their capital, their skills and know-how, and open jobs here in Croatia, or simply to go somewhere else. The average start-up time for doing business in Croatia is a rather uninspiring 22.5 days, in neighbouring Serbia it is typically 5.5 days, and in Slovenia, it usually takes 8 days.

These figures perfectly illustrate the two areas that remain ''cancerous'' to the system and hinder any progress - the judiciary and of course, the public administration. Although a company's name can be electronically registered at a commercial court, that same court needs an average of two entire weeks just to issue a piece of paper confirming it, and without them and their pieces of paper, it's impossible to open a company bank account or design and make a company stamp.

The worst of the worst in this situation appears to relate to construction licenses (159th place in the world) where instead of simplification, four new procedures have conveniently been added, so that the process lasts for an utterly ridiculpus 146 days. In a rather embarrassing comparison, Serbia is at 11th place with a 40-day shorter process.

There is a proverbial sea, no, ocean, of such examples and the naked truth is simple yet brutal: Croatia is definitely going in the right direction and is making a lot of progress, but other countries are simply doing much more.

It's now high time that the Croatian Government realised that Croatia is not above any other country, and that investments don't come knocking at the door because of natural beauty, warm weather and a nice beach or two, but owing to the ease of doing business, which should be any normal country's top priority.

With investors frequently having nothing but complaints, red tape taking an insane amount of time to get through and money simply being lost in the ''Bermuda Triangle'' that is Croatia, all while trying to make a stamp as if we've taken a trip back to the 20th century, the question is - when will the penny finally drop?

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Click here for the original article by Ana Blaskovic for Poslovni Dnevnik

Finances are something that are constantly on every adult's mind to some degree or another, but just how much does the average Croat have deposited in the bank and in other credit institutions?

As Poslovni Dnevnik writes on the 31st of October, 2018, the absolute value of these deposits in the continental part of the country is 35.8 percent higher than it is in the coastal part of the country, primarily because of Zagreb's continental location, the city in which 28 percent of all deposits in the country are concentrated.

With their typical policy of low interest rates on savings, Croatia's banks have helped to widen the construction sector in the often overlooked eastern part of Croatia, particularly in the City of Osijek, the seat of the largest Slavonian county, Osijek-Baranja County, in a welcome move which has at least partially awakened the construction sector, Glas Slavonije writes.

So, much much does the average Croat have deposited in the bank? It's something many wonder about, despite the common lack of desire to discuss personal finances.

Namely, a good amount of those individuals who have tens of thousands of euros in deposits, have been the most disappointed with rather unstimulating interest rate (0.01 percent), and they often withdraw their money from the bank and invests in the purchase of real estate, most often in apartments. Over the last couple of years in Osijek, the housing construction sector has resumed its business operations to a certain degree. The fact that this is no real exception was confirmed at yesterday's round table on the occasion of the marking of World Savings Day held in the headquarters of the Croatian Chamber of Commerce (HGK).

''At the end of 2017, the average resident in Croatia had about 45,600 kuna of deposits in credit institutions, while classic term deposits represent the largest single part of the financial assets of households in both Croatia and the Euro region. Due to the fall in passive interest rates and the introduction of savings taxes, citizens have diverted their funds into equity and other investment funds,'' stated Zvonimir Savić from HGK.

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As Darko Bicak/Poslovni Dnevnik writes on the 29th of October, 2018, in neighbouring Bosnia and Herzegovina, more than 40 percent of tobacco products end up being exported outside of the legal trade framework, and the main culprit for such a situation is poverty and disproportionately high yields on cigarettes and tobacco products. Could a potential move of production to Croatia provide a welcome economic boost for the country?

Even though British American Tobacco (BAT) have denied media speculation that they already started with the move of the production of their cigarettes from Bosnia and Herzegovina to their plants in both Croatia and in Serbia, they haven't gone as far as to totally exclude such a possibility in the forthcoming period.

Namely, the media in Bosnia and Herzegovina have announced that BAT's management board has decided that Aurora, Code and Diva cigarettes will be moved away from production in Sarajevo to neighbouring countries.

BAT, on the other hand, told Poslovni Dnevnik that producion at the Sarajevo Tobacco Factory (FDS) hasn't stopped.

"As BAT has bought FDS's brands, it is following the policy of producing and selling according to the smokers' preferences and in accordance with market conditions,'' they stated from the company.

Unfortunately, due to the large disturbances on Bosnia and Herzegovina's market caused by an increase in excise duties and the concerning collapse of the legal market by more than 35 percent in just three years alone, the sale and distribution of FDS former brands are not compromised, but all of BAT's other brands and other competitors on the market have been, and they therefore continue to face numerous unwanted challenges in this regard.

''On the illegal market itself, more than 80 illegally produced brands have appeared. Because of all of this, the future of production, the former brands of FDS, and of all the other legally produced brands on the Bosnian market is questionable,'' BAT explained.

They added that the black tobacco market is a major problem for this whole region, especially Bosnia and Herzegovina, where it exceeds a worrying 40 percent of the total market value. The main reason for this is the high tax burden because Bosnia and Herzegovina has the highest cigarette retail selling taxes in Europe, with the total costs representing 91 percent of the price of the cigarettes themselves.

Because of this, people in Bosnia and Herzegovina pay by far the most for cigarettes compared to the general standard of living in the rest of Europe, naturally leading them into a very tight corner, and then onto the illegal market, meaning that the economic repercussions of Bosnia's black market problems are dire, to say the very least.

BAT has estimated that Bosnia and Herzegovina's budget loses more than 230 million KM (about 115 million euro) per capita each year due the strong presence of the country's illicit tobacco market.

While Serbia, a non-EU country has been mentioned, could the safety of a European Union member state like Croatia be of some comfort to BAT and provide jobs and a possible economic boost to the domestic market if production was to be moved here?

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Click here for the original article by Darko Bicak for Poslovni Dnevnik