Saturday, 21 March 2020

Croatian Economy to Feel Fallout from Coronavirus Crisis Next Two Years

ZAGREB, March 20, 2020 - Director-general of the Croatian Employers' Association (HUP) Davor Majetić said on Friday that the economy would feel the consequences of the novel coronavirus for the next 1.5 to 2 years and perhaps even longer, adding that he expects the public sector to show solidarity with the private sector.

Commenting on the government's 63-measure rescue package, Majetić said that defining the criteria to hand out HRK 3,250 per employee marks the start of the first and most important measure that the government has adopted for now to bail out the economy.

That measure is exceptionally important for micro, small and medium-sized businesses and for large companies too that are having problems due to the coronavirus, Majetić believes.

"The measures will begin to be implemented as of Monday already and after that we hope that money will be paid into the accounts of all those employers experiencing problems with paying March wages because of the virus," he said.

Majetić added that it would no end with just that measure because it was certain that that would not be enough for all the challenges facing the economy.

"We are continuing with talks with the government primarily regarding the implementation of the remaining 62 measures which we expect to be very simple with smooth criteria whereby the speed of the implementation of each of those measures has to be important," he underscored.

More coronavirus news can be found in the Lifestyle section.

Friday, 20 March 2020

RBA: GDP to Drop 5% This Year

ZAGREB, March 20, 2020 - Croatia will face a steep fall in GDP this year, of almost 5% on the year, while seasonality in tourism demand and weak industry will make recovery slower in comparison with other countries, Raiffeisenbank Austria analysts have said.

The current situation and coronavirus spread will have a significant impact on the Croatian economy, especially due to its strong dependence on tourism, according to a special publication, "Covid-19", published by RBA on Friday.

It is already quite certain that there will be no preseason, and the impact of the epidemic on the peak tourist season is expected to increase. The consequence will be a fall in overnight stays and loss of tourism revenue, RBA said.

The bank's analysts reiterate that at least a fifth of overnight stays and tourism revenue in Croatia can be matched to Q2, while the main tourist season, which falls in Q3, accounts for 70% of overnight stays and revenue.

Among the sectors at risk, RBA analysts include the service sector, especially transport and all other services that depend on tourism: accommodation, food and beverage services, recreation and entertainment and travel services. They add that the manufacturing industry - chemical, paper, textile, lumber etc. - will most certainly experience a decrease in supply and demand since the main Croatian export markets are EU countries, especially Italy and Germany, so a slump in goods export is inevitable in Q2.

More economy news can be found in the Business section.

Wednesday, 18 March 2020

Inflation Down in Feb in EU, Euro Area and Croatia

ZAGREB, March 18, 2020 - The annual inflation rate in the EU and euro area was down slightly in February while the inflation rate in Croatia was the same as the euro area average, shows a report released by the European statistical office on Wednesday.

In the EU-27 the annual inflation rate measured by the Harmonised Index of Consumer Prices (HICP) in February was 1.6%, which is 0.1 percentage point lower than in January.

In the euro area the inflation rate was 1.2%, down by 0.2 percentage points compared to January.

The highest year-on-year price rise in the euro area was recorded for fresh food (+2.6%).

In February, the largest contribution to the annual euro area inflation rate came from the services sector (+0.72 percentage points), followed by food, alcohol and tobacco (+0.41 pp), and non-energy industrial goods (+0.13 pp).

The highest annual rates were recorded in Hungary (4.4%), Poland (4.1%) and Czechia (3.7%).

The annual inflation rate in Croatia in February was 1.2%. In January the inflation rate in Croatia was 1.8%, Eurostat's figures show.

Germany, which is Croatia's important trade partner and the largest euro area economy, recorded an inflation rate of 1.7% while Slovenia had an inflation rate of 2%.

The lowest annual rates were registered in Italy (0.2%), Greece (0.4%) and Portugal (0.5%).

More economy news can be found in the Business section.

Tuesday, 17 March 2020

80% of Companies Suffering Losses Because of Coronavirus

ZAGREB, March 17, 2020 - The impact of the coronavirus epidemic on business operations has been felt by 80% of domestic companies, which is an increase of 13 percentage points in just 16 days, the Croatian Chamber of Commerce (HGK) said on Tuesday, citing its latest survey.

Almost 60% of companies said that they have so far recorded losses of up to HRK 500,000, which is an increase of 5 percentage points compared to the previous survey, and if the situation continues, 11% of them expect losses of more than HRK 1 million.

"Tourism, agriculture and transport continue to be the most affected sectors and as a result of the decision to cancel all large gatherings, the arts, entertainment and recreation are now among the most jeopardised activities," HGK president Luka Burilović said.

It is particularly concerning that 6% of micro companies and 3% of large companies estimate that they will have to close down if the situation continues like this for another month, he added.

The survey shows that the greatest increase in the share of affected companies compared to the previous survey has been recorded in education, service industry and professional, scientific and technical activities and the most frequent problems relate to completing existing or already contracted works (+9 pp) and an increased decline of demand on the domestic market (+8 pp).

Travel agencies were the first to feel the crisis and more than half have recorded a fall in bookings of between 20 and 60 percent. As far as export and import companies are concerned, roughly the same number have had some difficulties (65%), with the number of medium-sized and large companies affected increasing significantly due to delays at the border.

Activities that have seen the biggest fall in imports continue to be travel agencies, transport and storage operators while manufacturing, construction, retail and wholesale companies are increasingly facing this problem as well, HGK said.

Almost 2,000 companies throughout the country participated in the survey.

More coronavirus news can be found in the Lifestyle section.

Sunday, 15 March 2020

Sales in Shops on Saturday up 41% Year-on-Year

ZAGREB, March 15, 2020 - Finance Minister Zdravko Marić said on Sunday that sales in shops on Saturday, compared with the same day in 2019, had increased by 41%.

"Yesterday, compared with the same day last year, sales increased by 41%," Marić told reporters after a meeting of the national civil protection service.

"Some retail chains told me that in the first half of the day consumption was nearly double the amount on the same day last year, but things stabilised towards the end of the day," the minister said.

He praised all warehouse workers, drivers and cashiers for their work. "All of us who went to the shops yesterday could see for ourselves that they were doing an excellent job," Marić said.

More coronavirus news can be found in the Lifestyle section.

Friday, 13 March 2020

HNB Has Intervened Three Times Against Depreciation Pressure

ZAGREB, March 13, 2020 - The Croatian National Bank (HNB) on Friday intervened on the foreign exchange market for the third time this week, selling €479.55 million to commercial banks.

HNB sold €479.55 million at a middle exchange rate of HRK 7.564914, withdrawing an additional HRK 3.63 billion from the financial system.

This is the third time in a week and this year the central bank has intervened with more than €1.2 billion being sold to banks withdrawing about HRK 9.1 billion from the financial system.

HNB on Monday sold €387 million at a rate of 7.512738 for HRK 2.9 billion. On Thursday it sold an additional €347.8 million at a rate of HRK 7.554019 withdrawing HRK 2.63 billion from the system.

Despite the three interventions the kuna continued to depreciate against the euro with the exchange rate decreasing by 0.16% against the euro currency since Wednesday.

The middle exchange rate to be applied as of Saturday will be €1 = HRK 7.569972, which is its highest level of the euro on the Croatian market since November 2017.

More economy news can be found in the Business section.

Thursday, 12 March 2020

Croatia Among EU States with Biggest January Drop in Industrial Production

ZAGREB, March 12, 2020 - Croatia, along with Luxembourg and Lithuania, in January 2020 recorded the greatest fall among EU member states in industrial production on the year, the European statistical office reported on Thursday.

In January 2020, seasonally adjusted industrial production in the EU27 decreased by 1.5% after revised figures showed that production in December 2019 fell by 3.5%.

The greatest increase in production in January 2020 on the year was recorded in consumer goods (+2.6%).

The biggest decrease in production in the EU27 was in the energy sector (-5.8%).

The highest increases in seasonally adjusted production in January 2020 were observed in Malta (+8.1%), followed by Poland (+3.4%) and Hungary (+2.7%).

The biggest drop in production year on year was recorded in Luxembourg (-9.2%), followed by Croatia (-5.5%) and Lithuania (-4.5%).

Industrial production in December 2020 in Croatia fell by 2.2% year on year.

Compared with December 2019, seasonally adjusted industrial production in the EU27 increased by 2% in January 2020.

In Croatia seasonally adjusted production in January 2020 increased mildly on the month (+0.6%) after falling by 1.6% in December 2019 m-o-m.

More economy news can be found in the Business section.

Thursday, 12 March 2020

Government and Businesses: It's Essential to Preserve Jobs, Business Activity

ZAGREB, March 12, 2020 - It is essential to preserve jobs and business activity, and specific measures to help businesses affected by the coronavirus epidemic will be known in the coming days, reporters were told after a meeting at the Finance Ministry on Wednesday.

The meeting involved the ministers in charge of economic affairs and representatives of the business and banking sectors.

Finance Minister Zdravko Marić said after the meeting that it had been agreed that preserving jobs was of paramount importance. He recalled that it had taken a lot of time to restore the number of jobs to the level before the 2008 downturn.

Marić also emphasised the need to ensure the flow of goods, adding that specific measures in that regard would be discussed in the coming days. He said that the businesses were trying to maintain cash flow and their operations.

The finance minister said that the government was not considering increasing taxes, adding that pensions and wages paid from the budget were not questionable.

The Director-General of the Croatian Employers' Association (HUP), Davor Majetić, said that employers met with sympathy on the part of the government and that they would analyse the situation together.

Since the measures are mostly aimed at preserving jobs, Majetić said that the employers would have to be provided with money for wages and liquidity.

More coronavirus news can be found in the Lifestyle section.

Wednesday, 11 March 2020

Retail Trade Turnover in January Jumps 6.2%

ZAGREB, March 11, 2020 - In January 2020, as compared to January 2019, retail trade turnover was 6.2% higher in real terms, which was the highest annual increase since February 2019, when it increased by 8.7%, the Croatian Bureau of Statistics said on Wednesday.

In January 2020, the total seasonally and working-day adjusted retail trade turnover was 2.7% higher than in December 2019 in real terms.

The real retail trade turnover has been growing since June 2019. In December 2019, the annual growth was 4.5%.

In January 2020, as compared to the same month of the previous year, retail trade turnover of food, beverages and tobacco increased by 4.3% and of non-food products (except of automotive fuels and lubricants) by 8%.

All trade branches realised a growth and the total gross retail trade turnover increased by 8.4% in nominal terms, as compared to January 2019.

The largest impact on the growth in the nominal turnover in January 2020, as compared to January 2019, according to unadjusted indices, was realised by non-specialised stores with food, beverages and tobacco with a growth of 7.9% in turnover as well as automotive fuels and lubricants recording a growth in turnover of 13.1%.

Raiffeisenbank Austria analysts say the latest data reflect the higher optimism in trade registered at the end of 2019. Moderate inflation, favourable conditions on the labour market and a high inclination to consumption have confirmed expectations that retail trade would have solid results in January 2020, they add.

They expect retail trade trends to remain favourable in Q1, while in the continuation of the year, notably in Q2, they expect it to be affected by the uncertainties and fears over coronavirus and its impact, notably on tourism turnover.

More economic news can be found in the Business section.

Tuesday, 10 March 2020

Croatia's Exports up 0.4% and Imports 1.3% in January

ZAGREB, March 10, 2020 - Croatia's commodity exports in January 2020 totalled HRK 8.3 billion, up by 0.4% compared to January 2019, while the imports rose 1.3% to HRK 14 billion, according to provisional data provided by the national statistical office (DZS) on Tuesday.

As a result, the country's foreign trade deficit was HRK 5.7 billion, which is by 154.3 million kuna more than in January 2019.

The coverage of imports by exports went from 59.9% to 59.4%.

Croatia's exports to other EU member-states rose by 3.6% to over six billion kuna on the year.

On the other hand, exports to non-EU members fell 7.2% to HRK 2.3 billion.

The imports from EU members increased 1.3% to HRK 11.5 billion, and from non-EU members by 1.5% to HRK 2.6 billion.

Expressed in euros, Croatia's commodity exports in January 2020 totalled €1.1 billion, down 0.2% on the year, while imports went up 0.8% to €1.9 billion.

The foreign trade deficit was €765.7 million, as against €748.8 million in January 2019.

The latest data on exports and imports in the whole of 2019, show that Croatia's commodity exports in 2019 totalled HRK 114.2 billion, up 5.8% on the year, while imports reached HRK 184.3 billion, an increase of 4.6%.

More economic news can be found in the Business section.

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