Wednesday, 6 July 2022

World Bank Official Confirms Partnership, Support to Croatia

ZAGREB, 6 July 2022 - Visiting Croatia on July 4-5, Gallina A. Vincelette, World Bank Regional Director for the European Union, held high-level meetings with key stakeholders to discuss the country's development priorities, the World Bank's support, latest macro-fiscal developments, and evolving global challenges.

Vincelette, who was accompanied by Jehan Arulpragasam, World Bank Country Manager for Croatia, and members of his team, met with Deputy Prime Minister and Minister of Finance, Zdravko Marić, Minister of Labor, Pension System, Family and Social Policy, Marin Piletić, Minister of Justice and Public Administration, Ivan Malenica, and key representatives from the Ministry of Economy and Sustainable Development, the World Bank said in a statement.

"The Government of the Republic of Croatia must be commended for its economic and fiscal performance in managing the recent challenging global developments. The authorities are also continuing to deepen integration with the EU by fulfilling all economic criteria for joining the euro area in January 2023," said Vincelette, expressing satisfaction with the government's progress in implementing the agenda outlined in its National Recovery and Resilience Plan.

"Effective implementation of reforms would enable Croatia to create better foundations for long-term growth and lead to a more resilient, greener, and inclusive society. The World Bank is committed to continuing to support Croatia in achieving these goals."

During her visit, Vincelette also participated in the opening of the new Land Registry Office of the Zagreb Municipal Civil Court, financed by the Integrated Land Administration System Implementation Project, which is supported by the World Bank. The renovation was part of a program of support provided for the modernisation of the Croatian land administration and management system, with the aim of improving its efficiency, transparency and cost effectiveness.

"The most visible result of our joint work has been the enhancement of land registry services. Croatian citizens now benefit from reduced time for processing land transactions, and can conduct numerous services online. Fifty five percent of requests for land services are currently made online. The modernized system will also support the sharing of land-related information among government agencies to address key development challenges, including private sector development, climate change adaptation, and disaster risk mitigation," she said.

The World Bank official also expressed satisfaction that the World Bank was able to help Croatia in connecting historic buildings, such as the new Zagreb Land Registry Office, with modern and smart architecture and design through reconstruction.

"This paves the way for a modern and reformed judicial system and land registry, truly benefiting Croatian citizens and the whole economy," she said.

The World Bank has been a partner to Croatia for 29 years. During this period, the Bank has supported more than 50 projects, totaling almost $5 billion, produced numerous studies, and provided technical assistance to help strengthen institutions and support the design of policies and strategies. The Bank's current program focuses on mitigating the economic and social impacts of COVID-19, post-earthquake reconstruction, education, social policy and pensions, transport, justice, innovation, business environment, land administration, circular economy, solid waste management, science and technology, and economic development of the Pannonian region, the World Bank recalled in its statement.

For more, check out our business section.

Wednesday, 14 July 2021

Jehan Arulpragasam New World Bank Country Manager for Croatia and Slovenia

ZAGREB, 14 July, 2021 - Economist Jehan Arulpragasam has been appointed the new World Bank Country Manager for Croatia and Slovenia, the World Bank Office in Croatia announced in a statement on Wednesday.

In this position, he will lead the World Bank Office in Zagreb and oversee the World Bank’s strategic, analytical, operational and knowledge program in both countries.

Mr. Arulpragasam is an economist with 35 years of experience working in international development in over 40 countries world-wide. His work has focused on inclusive growth and human development, covering a range of issues from macro-economic and fiscal policy to structural sector reform and social policy.

The World Bank's current program in Croatia focuses on mitigating the economic and social impact of COVID-19, post-earthquake reconstruction, transport, justice, innovation, business environment, land administration, science and technology, and economic development of the Pannonian region.

The World Bank has been a partner to Croatia for over 27 years. During this period, the Bank has supported more than 50 projects, worth almost US$5 billion, produced numerous studies, and provided technical assistance to help strengthen institutions and support the design of policies and strategies, the statement said.

For more about politics in Croatia, follow TCN's dedicated page.

Tuesday, 15 June 2021

Croatian PM Andrej Plenković Satisfied With World Bank Support in Post-Quake Reconstruction

ZAGREB, 15 June, 2021 - Prime Minister Andrej Plenković on Tuesday expressed satisfaction with the World Bank's support to Croatia's efforts to reconstruct the areas hit by the 2020 quakes, and with cooperation in projects aimed at facilitating the recovery of the private sector's exporters affected by the corona crisis. 

A press release issued by the government notes that the premier held a meeting with World Bank Vice President for Europe and Central Asia, Anna Bjerde, and a few other WB officials in Government House.

On that occasion, Plenković expressed satisfaction with the cooperation with the World Bank and the support that institution had provided to Croatia in the reconstruction since the earthquakes had struck Zagreb and Sisak-Moslavina County in March and December 2020.

He was quoted as saying that he was satisfied with the permanent cooperation in projects aimed at helping exporters in the private sector to recover from the consequences of the coronavirus pandemic.

The prime minister in particular thanked the World Bank for its support until now in preparing Croatia's 2021-2026 National Recovery and Resilience Plan. He underscored the importance of fostering further cooperation and the implementation of projects for Zagreb's reconstruction and revitalisation of the Banovina area in Sisak County, the press release said.

In June last year the World Bank approved two $500 million projects to provide urgent support to the government in an attempt to relieve the impact of the tremors that hit Croatia and of the lockdown caused by the COVID-19 pandemic.

The World Bank also provided technical support in preparing a Rapid Damage and Needs Assessment (RDNA 2020), which was an important document to mobilise €683.7 million from the EU Solidarity Fund. The World Bank also provided technical assistance in the RDNA for the earthquake-struck areas in Sisak-Moslavina County.

Bjerde was accompanied at the meeting by World Bank's Country Director for the European Union Gallina Andronova Vincelette, the World Bank's new country manager in Croatia Jehan Arulpragasam, and Special Assistant at World Bank Group Fanny Weiner.

For more about politics in Croatia, follow TCN's dedicated page.


Thursday, 9 January 2020

World Bank Raises Croatia's 2019 and 2020 Growth Forecast

ZAGREB, January 9, 2020 - According to the latest World Bank estimates, Croatia's growth in 2019 and 2020 is forecast to pick up to 2.9% and 2.6% respectively, which means that the difference from previous estimates is respective 0.4 and 0.1 percentage points.

The World Bank's Global Economic Prospects, issued on Wednesday. reads that in 2021, Croatia's economy is likely to slow to 2.4%, and this forecast is the same as in the previous report issued in June 2019. Croatia's economy is set to grow at the rate of 2.4% also in 2022.

The latest report reads that the growth in emerging economies in Europe and Central Asia, the region where Croatia is also added in the report, "is expected to firm over the forecast horizon, to 2.6 percent in 2020 and 2.9 percent in 2021-22, on the assumptions that key commodity prices and growth in the Euro Area stabilize, and that Turkey’s economy recovers from earlier financial pressures and Russia firms on the back of policy support."

Considerable variation across economies is expected to continue. "Economies in Central Europe are anticipated to slow as fiscal policy support wanes and demographic pressures persist, while those in Central Asia are projected to continue growing at a robust pace, and more rapidly than previously envisaged, on the back of structural reform progress."

Central Europe is forecast to sharply decelerate over the forecast horizon, to 3.4 percent GDP growth in 2020 and 3 percent by 2022.

Growth in the Central Europe is "highly dependent on the continued absorption of EU structural funds, with the current cycle expected to end in 2020."

"The regional outlook remains subject to significant downside risks, including slowing growth in major trading partners, geopolitical turbulence, heightened policy uncertainty, exposure to disorderly financial market developments, as well as weakening productivity growth over the long run."

Global growth set to pick up modestly to 2.5% in 2020 amid mounting debt and slowing productivity growth

Global economic growth is forecast to edge up to 2.5% in 2020 as investment and trade gradually recover from last year’s significant weakness but downward risks persist, the World Bank says in its January 2020 Global Economic Prospects.

"Growth among advanced economies as a group is anticipated to slip to 1.4% in 2020 in part due to continued softness in manufacturing.

"Growth in emerging market and developing economies is expected to accelerate this year to 4.1%. This rebound is not broad-based; instead, it assumes improved performance of a small group of large economies, some of which are emerging from a period of substantial weakness. About a third of emerging market and developing economies are projected to decelerate this year due to weaker-than-expected exports and investment.

"With growth in emerging and developing economies likely to remain slow, policymakers should seize the opportunity to undertake structural reforms that boost broad-based growth, which is essential to poverty reduction," World Bank Group Vice President for Equitable Growth, Finance and Institutions, Ceyla Pazarbasioglu, was quoted as saying.

More economy news can be found in the Business section.

Thursday, 24 October 2019

Croatia Moves Up Seven Spots in WB Doing Business Rankings

ZAGREB, October 24, 2019 - The latest Doing Business study, issued by the World Bank on Wednesday, shows that Croatia has continued to improve its business regulations and now ranks 51 on the ease of doing business ranking, moving up seven spots since its previous ranking.

The World Bank says that Croatia "is catching up with global regulatory best practices."

This year when the study covers 190 countries, Croatia ranks 51 on the ease of doing business, compared to 58 last year.

"The country’s ease of doing business score went up from 73.0 in the Doing Business 2019, to 73.6 in this year Doing Business 2020," the bank says.

"The European Union’s top performer in the Doing Business report is Denmark, with a score of 85.3. This year Croatia ranks closer to other EU countries such as Belgium, Slovak Republic, Netherlands and Poland."

The bank says that "Croatia implemented three reforms."

The country is praised for having made starting a business easier "by abolishing the requirements to reserve the company name and obtain director signatures for company registration, and by reducing the paid-in minimum capital requirement."

"Dealing with construction permits has become less costly by reducing the water contribution for building a warehouse. Transfer of property has become easier by decreasing the real estate transfer tax and reducing the time to register property title transfers. But Croatia also made accessing credit information more difficult by ending the distribution of individual credit data."

“We are encouraged to see Croatia improving its business regulations and narrowing the gap with the global regulatory frontier," Elisabetta Capannelli, World Bank Country Manager for Croatia, was quoted as saying.

"The Government chose to focus on easing doing business as one of its top priorities by establishing a working group under the Prime Minister’s watch and efforts made during the past year are reflected in this year’s improved ranking," Capannelli said.

"We expect to see even stronger commitment this year in areas such as starting a company and the implementation in Zagreb and at local level, of the recently launched reforms in construction permits. The World Bank’s Justice for Business Project currently under preparation with the authorities will help support the government’s reform agenda to improve the business climate," she said.

Croatia has the best score in the category of cross-border trade, maximum 100 points.

Its worst performance is in the category of issuing construction permits.

The ease of doing business ranking is topped by New Zealand, and is followed by Singapore and Hong Kong.

Denmark, South Korea, USA, Georgia, the UK, Norway and Sweden are also in the top ten performers.

More news about doing business in Croatia can be found in the Business section.

Wednesday, 9 October 2019

World Bank Upgrades Croatia's Growth Rate for 2019

ZAGREB, October 9, 2019 - The World Bank (WB) has upgraded its forecast of Croatia's growth for 2019 mainly thanks to solid domestic demand while the growth rate is expected to slow down over the next two years due to a slower increase in household consumption and investment as well as due to weaker foreign demand.

Croatia's growth is expected to pick up slightly in 2019 to 2.9%, the World Bank forecast in its Economic Update (ECA) Fall 2019 released on Wednesday, upgrading it from its June outlook by 0.4 percentage points.

In 2018, Croatia's GDP increased by 2.6%.

The WB slightly increased its outlook for Croatia's growth in 2020, by 0.1 pp to 2.7 percent, while in 2021 it foresees a slower growth of 2.4% which is equivalent to its June outlook.

Household consumption will make the largest contribution to overall GDP growth, which WB foresees will increase by 3.7%, reflecting further growth in employment and wages but also rising household borrowing.

A significant contribution could also come from investment activity both in the public and private sectors, partly reflecting greater EU funds absorption.

The WB foresees gross fixed capital to increase by 8.3% in 2019, double that of 2018. Government consumption is expected to increase by 3.5% after increasing by 2.9 pp in 2018.

The trade balance will continue to deteriorate and is expected to be higher than in 2018 considering that imports are expected to grow driven by strong domestic demand while exports are set to moderate and remain at last year's level.

The WB projects that Croatia's exports could increase by 2.8% while imports would grow by 6.3%. In 2018, exports increased by 2.8% and imports by 5.5%.

In 2020 and and 2021 that rate would remain stable at this year's level while the increase in imports should slow down to 5.3% in 2020 and 5.1% in 2021.

Inflation this year should slow down to 0.9%, down from last year's 1.5%. Next year inflation could step up to 1.0% and then to 1.4% in 2021.

In the next two years economic growth is expected to slow down due to expected slowing of household consumption as employment and wage growth gradually decelerate.

Investment growth too is set to moderate with an estimated growth of 6.4% of gross fixed capital investments in 2020 and 6.3% in 2021.

Exports might also edge down on the back of weak external outlook.

"Risks are skewed to the downside. Exports of goods are exposed to the risk of faster slowdown in external demand of Croatia’s main trading partners," the WB underscored.

"Tackling the weak potential of the Croatian economy would require a broad structural reform agenda with the aim to increase low productivity by raising the quality and mobility of both human and physical capital," the WB said.

The general government budget is expected to remain close to balance over the next two years, as revenues are expected to remain buoyant, while interest expenses could further diminish, the WB estimates.

A budget surplus of 0.2% is expected for 2019 while in 2020 a budget deficit is estimated at 0.2% and a balanced budget in 2021.

The public debt to GDP ratio could decline further to 70.4%, down from 74.5% in 2018. In 2020 it is expected to fall to 67.5% and in 2021 to 64.6%.

The WB warns that the decline in public debt could be negatively influenced by "strong pressures for wage increases in the public sector and a possible increase in spending before the general elections scheduled for Autumn 2020."

The report adds that "moderate economic growth should lead to steady income growth for the poor."

"Assuming that growth from 2019 onwards is equally distributed across all individuals, poverty would decrease from 4.2 percent in 2018 to 3.9 in 2019 and further to 3.3 percent by 2021," the WB says in its autumn outlook of Croatia's growth.

More GDP news can be found in the Business section.

Wednesday, 12 December 2018

Croatia and World Bank to Cooperate in Investments, Reforms

ZAGREB, December 12, 2018 - Prime Minister Andrej Plenković met on Wednesday with the World Bank's vice president for Europe and Central Asia, Cyril Muller, the government said in a press release, adding that Croatia and World Bank would continue to cooperate in investments and reforms.

Plenković said he was pleased with the cooperation with the World Bank to date and its support for Croatia's development, as confirmed by the EUR 3.5 billion granted in loans thus far.

He underlined that the government's policy focused on fiscal consolidation, structural reforms and investments.

He said that as part of a new strategy of cooperation with the World Bank, Croatia was considering areas where cooperation could be intensified, primarily regarding viability of public finances, improving competitiveness and the business environment, and balanced regional development.

Muller said the World Bank readily responded to Plenković's invitation to become even more involved in Croatia's economic development and investment projects.

He said the World Bank continued to support Croatia in reforms, notably those aimed at improving the business environment, healthcare, the judiciary, education, agriculture and transport.

More news on Croatia's cooperation with the World Bank, as well as on other business and economic developments, can be found in our Business section.