ZAGREB, 29 March 2022 - Germany is Croatia's key trade partner and Croatia is open to further investment by German companies, Prime Minister Andrej Plenković said on Tuesday after meeting with a delegation of the German Eastern Business Association.

The meeting discussed the strengthening of Croatian-German economic cooperation and the main areas for the further investment by German companies in Croatia, the government said in a press release.

Germany remains Croatia's number-one foreign trade partner and trade in 2021 totalled €6.4 billion, it added.

The meeting at the government was also attended by Foreign Minister Gordan Grlić Radman and Economy Minister Tomislav Ćorić.

The German Eastern Business Association is a regional initiative of the German economy for 29 countries in Central, Eastern and Southeastern Europe, the South Caucasus and Central Asia,. It has around 350 member companies.

Plenković informed the delegation of Croatia's strong economic recovery in 2021 and the government's plans to further stimulate growth, the utilisation of European funds as part of the National Recovery and Resilience Plan and the new EU budget, and upcoming steps to join the Schengen and euro areas.

The prime minister also informed the delegation of tax relief measures as well as those to advance the investment and business climate in Croatia.

He also commented on the Russian aggression in Ukraine, Croatia's measures to help Ukraine, and the war's repercussions on energy and food supplies.

The German companies presented their existing and potential projects in Croatia, confirming their willingness to continue to cooperate and invest.

To date, German companies have invested €3.9 billion in Croatia, making Germany one of the biggest investors, the government said.

ZAGREB, 22 Feb 2022 - HRK 5.5 billion is expected to be invested in the development of a competitive and energy efficient transport system in Croatia by 2027, and 40 per cent of it will go towards railways modernisation, a panel said on Tuesday.

An additional HRK 900 million has been secured for investment in broadband internet coverage for all sectors that are key for recovery and resilience, Dario Soldo, director of the Construction and Transport Division at the Croatian Chamber of Commerce (HGK), said at the panel on the use of funding from the National Recovery and Resilience Plan and the EU in the transport and logistics sector.

The dean of the Zagreb Faculty of Transport and Traffic Sciences, Tomislav Josip Mlinarić, said it was important that the HRK 5.5 billion was duly spent, stressing that the faculty was willing to contribute to projects with its knowledge. He said that the modernisation of the transport sector would make the entire economy better and faster.

Professor Marko Šoštarić from the same faculty said that the focus would be on promoting sustainable forms of travel, including cycling, and modernising public transport infrastructure. He said that freight transport should use railways and internal waterways as much as possible. 

 (€1 = HRK 7.5)

ZAGREB, 10 Feb 2022 - PEARL Infrastructure Capital, a French investment fund specialised in financing environmental infrastructure projects, has to date invested more than €50 million in biomass co-generation plants in Croatia, it was said at a presentation of its projects in Virovitica on Thursday.

The three plants, located in eastern Croatia, generate 18 megawatt of electricity per hour from biomass. These are the Energy 9 plant in Slatina, A&A Bioenergy Viro in Virovitica, and Uni Viridas in Babina Greda.

The Pearl Infrastructure Capital Deputy General Manager, Guillaume de Forceville, said that within one year, the fund had made considerable investments in co-generation.

"We have arrived in Croatia due to its favourable regulative framework," De Forceville said.

He added that they had plans to make some more investments but stopped short of specifying the possible amounts.

The current projects, including these three plants, have created roughly 600 jobs, he added.

The economy and sustainable development ministry's state secretary, Ivo Milatić, said that such investments "are perfect for the Croatian energy sector".

These three plants are also important as they are a stable source of energy, Milatić added.

The electricity produced in the plants is sold to the Croatian grid through a state-guaranteed long-term power purchase agreement with the national operator. They also provide heat.

Milatić noted that these plants have the status of energy producers with preferential treatment, and there are many such producers in Croatia, generating 3.4 terawatt hours of electricity annually, while the annual consumption of electricity in Croatia comes to 18.5 terawatt hours.

French Ambassador to Croatia Gaël Veyssière said that the investments of the Pearl group were an example of good economic cooperation.

This is an important moment in the French presidency over the EU, and it is important to contribute to efforts to change the economy in the EU deeply so as to make the Union greener and more sustainable, and biomass is a component in that regard, said the ambassador.

Croatia's National Recovery and Resilience Plan envisages 40% of investments in green and sustainable economy and these plants are part of that, he said.

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ZAGREB, 8 Feb 2022 - An HRK 97 million agreement on the reconstruction of a state road and the construction of the wastewater system in the town of Sveti Ivan Žabno was signed in that northeastern Croatian town on Tuesday.

Mayor Nenad Bošnjak hailed the investment, and said that this was a historic day for the community that will get renovated road infrastructure and new wastewater infrastructure.

The state-run Hrvatske Ceste road operator will invest HRK 57 million in this project.

The director-general of the Hrvatske Vode water management company said that 550 households with 1,260 members would be connected to the sewerage.

Currently, the state authorities are implementing 60 infrastructure projects in the water management sector, and the investments are estimated at two billion euros, said Mario Šiljeg, state secretary of the economy and sustainable development ministry.

(€1 = HRK 7.52)

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.

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ZAGREB, 24 Oct, 2021 - Croatian citizens set aside HRK 549 in savings a month on average, 15% more than last year, according to the findings of a survey done by the IMAS agency this past July and August.

The survey covered a little over 500 respondents and was commissioned by the Erste Group.

The findings show that men save HRK 593 a month on average and women HRK 507.

Eighty-two percent of men as well as women consider saving important or very important.

One of the aims of the survey was to find out how the long period of low interest impacted people's saving habits. According to the findings, 25% of respondents keep the money saved in their current account, 15% invested by buying real estate, and 37% did not change anything.

As for the reasons for saving, 67% respondents save for unexpected situations, 43% to have financial resources for themselves and their families, 18% for retirement, 16% for major purchases such as a home, car or mobile, 15% for travel, and 10% for education.

Forty percent of respondents save using savings accounts, while 3% invest in real estate.

In central and east Europe, Austrians save the most per month with €344 on average, €72 more than last year, followed by Slovaks with €123 and the Czech with €119, both €10 more than in 2020.

Besides Austrians, Hungarians had the highest annual increase in monthly savings, by €19 to €82.

Croats save €72 on average, Romanians €58 and Serbs €47. In all countries most respondents save for a rainy day, including 94% of Slovaks.

The findings show that the pandemic has not significantly impacted saving habits, with 77% of respondents saying they save about as much as before COVID-19, including 87% of those aged 15-34.

As to the impact of the pandemic on their general financial situation, 50% of respondents said it was mildly negative, 35% said it had no impact, and 10% said the impact was strong.

Seventy-one percent of Austrians and 67% of Czechs believe the pandemic had no impact on them, while 18% of Hungarians and Serbians as well as 13% of Romanians said it had a strong negative impact.

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July 23, 2021 - Opatija is known to be Croatia's "cradle of tourism", hence, it's no wonder that it became home to HUBBAZIA - a centre for creativity and innovation in tourism. This business incubator, co-financed by the European Union, is now accepting applications from start-up companies that have original, sustainable, and creative ideas to further boost tourism entrepreneurship in Opatija. Applications are open until August 5, 2021! 

One of the most important (if not the most important) economic branches in Croatia is tourism and through HUBBAZIA, the City of Opatija encourages and attracts young startup companies to open and create new sustainable business ideas to further enhance the development of tourism in the city by providing full management training and mentoring, fully-equipped co-working space for brainstorming and lastly, venture capital financing. Joining HUBBAZIA is a great opportunity for young entrepreneurs to help increase their company's efficiency while significantly reducing looming business risks.

In return, through this project, the City of Opatija hopes to attract more foreign and domestic investors, regional economic and social development growth, and a more fulfilling relationship between the city's small to medium enterprises and the local community's needs. With HUBBAZIA amounting to a total value of HRK 2,543,985.25 (EUR 338,850.47), thanks to the European Regional Development Fund, the project will serve as big assistance to youth who are striving in launching their own businesses and will ensure the growth of Opatija's tourism industry.

Conditions for application 

The City of Opatija, together with PAR Business School, welcomes young entrepreneurs who have innovative ideas and business models related to tourism AS LONG AS the business entities are not older than 3 years. The program will have 5 project cycles, meaning, it will have 5 generations of participants. The deadline for the application for its 1st cycle will be on 05.08.2021 at 12:00. The workshops and mentorships will begin on 16.08.2021 and will be held in the newly renovated and modernly equipped Villa Antonia. If interested, CLICK HERE for the application link.

What to expect?

After the submission of all applications closes, HUBBAZIA will conduct the selection phase which usually lasts for 1 month. If your business manages to get through, you will enter the mentoring and education phase which lasts for 4 months along with 25 hours of workshops each month. Here, your company will be mentored by experts in business, finance, marketing, sales, web design, investment, and product development to help you shape and enhance your business ideas. Next is the final consultation/construction phase, where you will be given a month to finalise your business construction model. The whole cycle culminates on Demo Day when participants get to present their ideas to the public and attract investors. 

Attendees will be entitled to have free co-working space, internet, meeting room, consumables for training, counseling, and mentoring, presentation on HUBBAZIA websites and social networks, and minimized initial fixed costs. Most importantly, HUBBAZIA will be a space for like-minded individuals to brainstorm and network their business with other entrepreneurs and to gain a wider range of business information and contacts - a definite and exciting once-in-a-lifetime chance!

For more details on HUBBAZIA, CLICK HERE.

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ZAGREB, 9 June, 2021 - Over the next five years, the Podravka Group plans to invest about HRK 5 billion in the modernisation and digitalisation of production and logistics, marketing and acquisitions, the group said on Wednesday after the Supervisory Board green-lighted its business strategy until 2025.

"The implementation of the adopted strategy includes investment of about HRK 1.7 billion in the modernisation and digitalisation of production and logistics processes, about HRK 1.4 billion in marketing to achieve organic growth, and about HRK 2 billion for acquisitions," Podravka said in a statement.

The group's Food division will focus on product and packaging development and innovation to increase the availability of products and adjust them to the needs and habits of different consumer groups.

The business strategy also sets the criteria for the consideration and selection of acquisitions. With possible acquisitions in the Food division, Podravka aims to strengthen its presence and position on markets to pursue further accelerated growth.

The Pharmaceuticals division (Belupo) will focus on strengthening growth on international markets, notably in central and eastern Europe, expanding its portfolio with products  in additional anatomical, therapeutic and chemical groups, and boosting growth on the domestic market by introducing new products.

(€1 = HRK 7.5)

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ZAGREB, 12 May, 2021 - During a visit on Wednesday by Prime Minister Andrej Plenković to the British American Tobacco (BAT) factory in Kanfanar, BAT revealed an investment of HRK 200 million in the production of a new category of heated tobacco products (HTP), underlining the importance of the new logistics centre in Rijeka.

"By expanding production in Kanfanar and opening a hub in Rijeka, we are continuing with BAT's significant investments in Croatia. With the introduction of production lines for new product categories, Croatia is additionally strengthening its position on the global map of production sites in the tobacco industry. We are continuing to expand our selection for consumers in Croatia," BAT Adria director Zvonko Kolobara said in a statement to the press.

He added that the increased capacity in Kanfanar would help BAT meet growing demands for HTP in Europe and northern Africa.

Kolobara thanked the government and Prime Minister Plenković for their efforts in creating an investment climate that stimulates further investments.

Plenković expressed satisfaction that BAT is continuing with its investments in Kanfanar and ensuring jobs. BAT's announcement of the investment comes after its announcement that it could leave Croatia due to unfavourable business conditions.

Plenković underlined that the new investment was an example of a good business climate and that BAT did not exert any pressure on the government to meet its demands to continue doing business in Croatia.

"The new, HRK 200 million investment in new products means a new impetus, enthusiasm and a new generator of business and with that, a contribution to Croatia's economy. The company employs 1,600 people and another 800 cooperate closely with BAT and make a living that way. The investment plans have been coordinated with their headquarters in London and all the employees at the factory will be satisfied while the entire economy of Istria County will benefit from BAT's operations," said Plenković.

He noted that the government was open to large global investors.

"It is excellent that BAT has established a hub in Rijeka for products from China that are distributed throughout Europe. That is additional confirmation of Rijeka's attractiveness as an exceptionally important transport and commercial port in the country. As far as BAT's staying is concerned, the government took account of the Croatian economy and creating conditions for all foreign companies doing business in Croatia and investors to have the same treatment. It is obvious that BAT has decided that the Kanfanar factory is important and that it wants to invest and that Croatia is important to it. There was never any pressure," said Plenković.

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ZAGREB, 8 April, 2021 - The government on Thursday made decisions on the implementation of programmes for financing local infrastructure and rural development projects in areas populated by national minorities, for which HRK 20 million was earmarked in this year's budget.

The programmes pertain to areas that are markedly below the national development average in which national minorities make up at least 5% of the population according to the 2011 census.

Regional Development Minister Nataša Tramišak said the programmes would ensure the minimum standards of municipal and social infrastructure as well as financial instruments for family farms.

The government also adopted a regulation on the financing of national minorities' public needs to enhance their rights and protect as well as promote their cultural, national, linguistic and religious identity.

Waters Act amendments

Also today, the government sent to parliament amendments aligning the Waters Act with EU legislation.

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