ZAGREB, 27 April 2022 - The volume of industrial sales in Croatia in February 2022 was 21.9% higher than in February 2021 and 6.9% higher than in January 2022, according to figures released by the Croatian Bureau of Statistics. 

Compared with February 2021, industrial sales increased by 19.3% on the domestic market and by 25.7% on foreign markets.

Broken down by main industrial groupings, sales of durable consumer goods increased by 46.6%, sales of energy by 44.0%, sales of intermediate goods by 32.3%, sales of capital goods by 16.2% and sales of non-durable consumer goods by 11.3%.

Industrial sales had been on the rise since the beginning of 2021, with the exception of February when they dropped by 7.7%. The lowest annual increase, of 1.7%, was recorded in January, after which double-digit increases were recorded, and the highest in April 2021, of 40.6%.

Compared with January 2022, industrial sales went up by 7.6% on both the domestic and foreign markets.

Month on month, sales of durable consumer goods increased by 33.7%, sales of energy by 28.6%, sales of intermediate goods by 12.9% and sales of capital goods by 7.3%, while sales of non-durable consumer goods remained unchanged.

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

ZAGREB, 17 Dec 2021 - The Croatian economy is expected to grow at a rate of 9.5% in 2021 and 4.6% in 2022, the Croatian Banking Association (HUB) said on Friday, citing projections by the four largest banks in Croatia.

HUB once again revised the Croatian GDP growth rate upward from July's estimate of 5.3%.

The national economy is expected to grow at a rate of 9.5% this year, with economists' projections ranging between 9.2% and 9.7%, HUB said in its latest outlook.

"That isn't surprising considering the developments and data released since July. Croatia is firmly positioned in the group of Central and Eastern European countries which are mostly surpassing the pre-pandemic level of economic activity," the report says.

Bankers' optimism isn't waning for 2022 either with the average expected growth rate forecast at 4.6%, with very little divergence in estimates - from 4.4% to 4.8%. 

Increased inflation to "eat up" a great deal of wage growth

The analysts expect that the accelerated economic growth will spill over to the labour market through lower unemployment rates and increased wages. They expect wages to increase by 3.7%, which is a faster rate than the 2.9% inflation rate estimated for next year.

The difference between the two rates is less than in previous years. "In other words, increased inflation will 'eat up' a great deal of the expected growth in nominal wages," HUB said.

The two main drivers of economic growth will be exports and investments. After a spectacular increase in exports this year, this trend is expected to continue at a high rate of 12% in 2022 while investments are expected to accelerate from 9.2% in 2021 to 11% in 2022.

NPOO to stimulate investment

Given that the corporate sector is still fairly passive with regard to investment, the main stimulus to investment in the short term should come from state investments, depending on how quickly funds from the National Recovery and Resilience Plan (NPOO) are activated. 

Croatia to catch up with ECB monetary expansion

HUB said that the general government balance to GDP ratio is decreasing roughly in accordance with government projections by 4.5% in 2021 and by 2.9% in 2022, and that gross public debt should decrease from 87.3% in 2020 to 82.9% in 2021 and 79.7% in 2022.

With regard to Croatia's aspirations to join the euro area in 2023, the analysts believe that the European Central Bank's quantitative easing policy will continue long enough for Croatia to catch, in terms of the impact of euro area monetary policies on demand for Croatian government bonds.

For more on business, follow TCN's dedicated page.

ZAGREB, 27 Aug 2021 - Finance Minister Zdravko Marić said on Friday that he could be pleased with the state of the budget and that it was in line with expectations, with some tax revenues exceeding them, such as VAT, which outperforms its 2019 level since the beginning of the year.

As the level of employment has been preserved, and even increased, Marić is also pleased with the amount of paid contributions for pension insurance.

He underscored again that the key to the sustainability of public finance lay on state budget expenditures, on which great emphasis was placed.

Asked by the press whether the government had a clear reform plan on the table, for instance, for health care, which is a great burden on the budget, the finance minister recalled the National Recovery and Resilience Plan (NPOO) had been adopted and it listed reforms in various segments.

The health care reform, Marić said, should go beyond what is written in the NPOO, because that is a more comprehensive process which everyone knows is needed, Health Minister Vili Beroš is working on it, and the entire package of measures should be presented to the public by the end of the year.

Asked about job-retention grants for entrepreneurs, Marić recalled there were conditions for those grants, such as a drop in revenue, so those grants were not crucial for a significant part of businesses. However, he added that one always had to be braced for any negative surprises.

For more on politics, CLICK HERE.

ZAGREB, 27 Aug 2021 - The latest GDP data for the second quarter of 2021 show that Croatia formally exited recession after four consecutive quarters of downturn, the Croatian Employers' Association (HUP) chief economist Iva Tomić said on Friday.

Croatia's economy grew by 16.1% in the second quarter of 2021 compared to Q2 2020, which is the first time it grew after going down for four consecutive quarters and at the highest rate since 1996, when the national statistical office started collecting those data.

Tomić underscored that this growth rate placed Croatia among the best performers in the European Union considering the 2021 Q2 GDP.

Croatia, Spain, France, Hungary, Italy and Portugal are together with Croatia at the top of the ranking, after those countries experienced a double-digit fall in the same period last year, Tomić said underscoring that all components in GDP had risen in Q2 compared to Q2 2020.

For more on business, CLICK HERE.

ZAGREB, 27 Aug 2021 - The robust growth in the second quarter of 2021 is within expectations based on the relevant indicators, the Croatian Chamber of Commerce (HGK) said on Friday in its comment on the preliminary data showing the Q2 16.1% economic growth year-on-year.

The HGK's analysis shows that all the big sectors had high growth rates in the second quarter compared to 2020 Q2.

For instance, industrial output increased 13.9%, retail trade jumped 20.5%, and the volume of construction work increased 16% in the second quarter this year, the HGK recalls. Furthermore, tourist arrivals skyrocketed 131.7% compared to the second quarter of 2020, and their overnight stays increased 129.2%.

The HGK says that all the basic activities contributed to the growth on the year.

For more on business, CLICK HERE.

As Adriano Milovan/Novac writes on the 2nd of April, 2019, the economic expansion period for most of the transition countries, including the Republic of Croatia, is now over, and in the coming years we can count only on very modest rates of economic growth, this was the message from experts from the renowned Vienna Institute for International Economics Studies (WIIW).

According to the latest forecasts of the Vienna Institute, this year, Croatia can expect a growth rate of 2.6 percent. However, in the coming years, economic growth will slow down even more, meaning that the Croatian economy will likely grow at a rate of 2.5 percent in 2020 and again in 2021. Although the GDP growth rate of 2.5 percent doesn't deviate much from the previous growth rates in Croatia, given that they were still less than in other comparable countries of the so-called "New Europe", it's worth noting that this rate is still less than was previously expected.

Additionally, and more concerningly yet, the Republic of Croatia will be among the new EU member states with the lowest rates of economic growth of all. On the other hand, the fastest growing economies among transition countries will rather surprisingly be non-EU European countries, such as Kosovo and Albania and even more surprisingly, Moldova, at least according to an analysis taken by the esteemed Vienna Institute. According to these forecasts, Kosovo's economy, for example, was to grow at a rate of 4.1 percent this year, in the following year at a rate of four percent, and in 2021, at a rate of 3.9 percent.

In their forecasts, the analysts of the Vienna Institute cited the slowdown of economic growth in the world as a whole, especially in Germany, and the strengthening of protectionism in world trade and uncertainty brought about by Brexit (should it occur at all), as among the main reasons for the ''cooling'' of the transition economies.

Openly, however, the question remains about how the current crisis in Uljanik will reflect on the Croatian economy as a whole. Vladimir Gligorov, a longtime analyst at the Vienna Institute and now an external associate, says the events in Uljanik will have negative effects on the Croatian economy in the short term, primarily through the activation of state guarantees and the cost of dealing with former workers who will be left jobless, but in the medium term, it shouldn't actually reflect all that much on the macroeconomic image of the country that significantly.

The attitudes of Croatian macroeconomists, Zeljko Lovrinčević from the Zagreb Institute of Economics and Zdeslav Šantić, the chief economist of OTP banka, don't differ significantly from the above statement from the Vienna Institute, and they also don't expect huge consequences on the Croatian economy from the collapse of Uljanik. Moreover, Lovrinčević believes that the first half of this year could be even better for Croatia than expected, whereas we will likely only feel a slight slowdown in the second half of this year and next year.

Make sure to follow our dedicated business page for much more.

Click here for the original article by Adriano Milovan for Novac/Jutarnji