Tuesday, 5 April 2022

Good News as Croatian Labour Market Revival Stronger Than Ever

April the 5th, 2022 - The Croatian labour market revival is currently stronger than ever, with the search for staff across many sectors, but of course with the tourism industry dominating above all, never having been higher.

As Poslovni Dnevnik writes, during the first quarter of 2022, more than 24,000 job advertisements were published on the MojPosao/MyJob portal, which represents a growth of as much as 33 percent when compared to the first quarter of last year and growth of 32 percent when compared to the first quarter of pandemic-dominated 2020. Compared to the pre-pandemic year of 2019, according to the demand for labour recorded back then, this year, 11 percent more ads looking for employees were published.

Therefore, the MojPosao portal can safely conclude that the Croatian labour market has well and truly recovered from the consequences of the crisis caused by the emergence of the novel coronavirus which resulted in a global pandemic and that the demand for workers across the Republic of Croatia has never been higher.

In human resources and tourism, more workers are needed

Compared to last year, the highest growth in labour demand was recorded in the following sectors: Human resources, where as many as 137 percent more job advertisements were published than in the same period last year, then in Tourism and hospitality (+ 135 percent) and Warehousing and logistics (+ 112 percent).

Last year, a partial lockdown owing to the pandemic lasted until about March and companies hiring seasonal workers were very late in finding and hiring workers for the summer tourist season.

Compared to the pre-pandemic year of 2019, this year, Croatia recorded the highest growth in the categories: Human resources (+ 63 percent), Mechanical Engineering and Naval Architecture (+ 55 percent), Warehousing and logistics (+ 53 percent) and Pharmaceuticals and biotechnology (+ 53 percent).

Waiters are still the most sought after workers in Croatia, and in second place come merchants, followed by chefs, warehouse workers, drivers and developers. According to the OVI index from March 2022, the demand for labour is 33 percent higher than it was back during March 2021 and 65 and 27 percent higher than in March 2020 and even March 2019.

The most sought-after occupations in March this year were salesmen, chefs, waiters, warehous workers and drivers. 44 percent of job ads offered a permanent contract, while 43 percent of those ads offered a fixed-term contract. About 1.8 percent of job advertisements mentioned the possibility of working from home, while 3.2 percent of advertisements were aimed at retirees.

For more on the Croatian labour market and working in Croatia, make sure to check out our lifestyle section.

Friday, 1 April 2022

Economy Minister Believes 2022 Will Be Year of Further Growth

ZAGREB, 1 April (2022) - Economy and Sustainable Development Minister Tomislav Ćorić said on Friday he believed the year 2022 would see a further growth of the national economy.

"I believe that the Croatian economy will show in 2022, just as it did in 2021, the kind of resilience that opened the door to convergence towards the EU average," Ćorić said at a meeting of exporters, organised by Lider business weekly.

Recalling Croatia's growth rate of more than 10% in 2021, the minister said that this year could be like that as well. "That is our goal and I believe that with good exporters, we can make it happen," he said.

Croatian exporters share the fate of all European exporters who are in any way connected with the Russian Federation, while the situation is somewhat easier for exporters with diversified portfolios, whose business is not predominantly oriented to Russia, he said.

Croatia does not have too many companies that are exposed to the Russian market, he said, adding that the current situation could be overcome by companies expanding their market to other European countries, while the government would help by facilitating competition, primarily by enabling greater energy efficiency and lower production costs.

Ćorić announced a HRK 1.9 billion tender to be published by the end of Q2 referring to energy efficiency, which should help the manufacturing industry increase its capacity.

Some of the exporters have liquidity problems due to a decline in business in the Russian Federation, he said, noting that the Croatian Bank for Reconstruction and Development (HBOR) would step in.

DIV Group: Situation requires rapid response

Answering questions from the press, a member of the DIV Group Management Board, Darko Pappo, said that DIV was very much affected by the current situation because two major projects were financed by a Russian-owned bank, with EU sanctions against Russia having prevented the completion of the projects and their refinancing.

"We are talking about two loans amounting to €90 million, with our share totalling around €60 million. That is a huge amount of money and this has made us suspend production," he said, adding that he expected the government to make decisions fast to help the shipbuilding group overcome the situation.

He added that there were end-buyers for both projects, contracts on long-term lease and a repayment schedule, and that, even though state aid is not necessary, the situation requires a prompt government reaction.

The government should support DIV's proposal for the loans to be refinanced with HBOR funding under commercial terms, and one of the loans should be fully repaid by the end of the year while the other would be repaid over a longer period of time, he said.

"That would ensure the continuation of production and normal functioning," he said, adding that both the Brodosplit shipyard and DIV Group operate in the black and employ a large number of workers, which is why they believe the government and HBOR should step in.

Pappo recalled that the recent case of Sberbank showed that a prompt reaction by the government was possible.

AD Plastik focusing on new deals 

Marinko Došen, Management Board chair of plastic car parts manufacturer AD Plastik, said the revenue from the Russian market accounted for 20-25% of total revenue and that the company's two factories in Russia were currently not operating and there was no information on when they could resume operation.

AD Plastik is an export-oriented company, focusing on new deals and expanding to markets where it will be able to operate, Došen said.

As for the rise in energy costs, he said that the cost of energy products had gone up significantly for all businesses and that state aid would be welcome as it would also help them cover the cost of labour for markets that were currently inaccessible.

For more, check out our business section.

Tuesday, 29 March 2022

Croatian Covid Certificates Remain Necessary for Government Support

March the 29th, 2022 - Croatian covid certificates are going to remain necessary for companies to receive state/government support despite the fact that in most other places across the country and indeed across Europe in which they were once needed, they're being scrapped.

As Marina Klepo/Novac/Jutarnji list writes, employers operating within economic activities with reduced activity can continue to count on the government's job preservation aid for the months of March and April in the maximum amount of 4,000 kuna per worker, but they'll need to show they still have valid Croatian covid certificates

As reminded in the Ministry of Labour and Pension System, Family and Social Policy, "state support is approved based on a drop in income of 40 percent and more."

It is also awarded to employers from the areas where the earthquakes of 2020, those from Sisak-Moslavina, Zagreb and Karlovac counties, regardless of their sort of field or economic activity. Croatian covid certificates are still a condition for receiving any government support.

"Grants in the amount of 100 percent are received for all workers if 70 percent of them or more have Croatian covid certificates, and if there are fewer, then those grants are awarded proportionally," they said from the competent Ministry, which has been paying grants monthly since the global coronavirus pandemic began way back in March 2020 to try to preserve jobs.

About 13 billion kuna has been invested in these grants, and when contributions are added to that, the amount soars to a massive 17 billion kuna. Largely thanks to these subsidies, the Croatian market remained more or less stable during the height of the pandemic, and the number of insured persons has been growing almost continuously.

Back at the beginning of the year, the CES announced that it would continue to pay subsidies to employers who shorten their working hours due to business difficulties, but this is now possible in the amount of up to 50 percent, meaning that the amount of support per employee was reduced from a maximum of 4,000 kuna down to 2,000 kuna. Part-time support is mostly used in labour-intensive activities, such as in the textile, clothing, footwear, leather and wood sectors. At the end of last year, it was used by 2,368 employees.

Back at the end of December, the CES Council adopted a package of Active Employment Policy Measures for this year after the Croatian Government announced a new measure called "I choose Croatia/Biran Hrvatsku", which aims to "motivate the return of emigrants, encourage them to start a business in their homeland and encourage population regeneration in areas with pronounced emigration ".

Green and digital business

This year's measures are mainly a continuation of the measures that have been offered to companies before, from support for employment, internships, training and self-employment and more. In addition, part of the existing grants (those for self-employment and internships) has been extended to cover green and digital jobs.

For more, check out our business section.

Wednesday, 23 March 2022

Croatian Inflation Eating Up Wages as Situation Remains Problematic

March the 23rd, 2022 - Croatian inflation is quite literally ''eating'' people's wages, with more and more of the typical wage packet being spent on food, the price of some of which has soared. It's difficult to believe what 100 kuna could get you a couple of years ago in comparison to now.

As Poslovni Dnevnik writes, you'll have much less in your basket or bag if you want to spend about 100 kuna in a store or at the market than you would have a couple of years ago. People are aware that prices are rising day by day, and it might bring it home to point out that a few things have become up to 50 percent more expensive during this ongoing wave of Croatian inflation.

Prices are rising on a weekly basis, and if we turn the clock back two years - for the same amount of money we could buy even more: For 100 kuna in pandemic-dominated 2020 you could buy 15 and a half litres of milk, and today, it will get you around 13 litres. Sunflower oil could be purchased for 100 kuna in the amount of about 9 litres, and today, it will get you about 6 and a half only. At the beginning of 2020, you could fill up with 11 litres of petrol for 100 kuna. You'll only get 7 litres now.

From April the 1st this year, VAT on some products will be lower, but this only partially affects prices for consumers, according to a report from Dnevnik.hr.

Minister of Finance Zdravko Maric says that the price of butter has significantly increased over the past few weeks and months, which had nothing to do with taxes. "We believe and hope that with this significant reduction in VAT, there will be enough space to reduce and mitigate any further moments in terms of prices," said Maric.

Although the average Croatian salary has also grown to reflect the current situation, it's abundantly clear that the money being earned is worth less than it once was.

As such, for the entire average Croatian salary, which in 2020 amounted to 6763 kuna, it was possible to buy 732 litres of fuel. Now, in 2022, the average salary rose to around 7,300 kuna, but that's only enough for 564 litres of fuel today. A huge amount of employees in this country earn even less, with 50 percent of the working population having a salary of less than 6,000 kuna per month.

The average person spends as much as 27 percent of their income on food, but for many, that percentage is far higher. Kresimir Sever from the Independent Croatian Trade Unions has duly warned that the share of food costs among the less financially stable is higher than 40 percent and even 50 percent of their salary or monthly pension.

Rising prices naturally work to reduce consumption. Therefore, Standard & Poor’s predicts GDP growth of 2 and a half percent, as opposed to 5 percent.

For more, check out our lifestyle section.

Monday, 21 March 2022

Minister Zdravko Maric Satisfied with S&P's Credit Rating for Croatia

March the 21st, 2022 - Croatian Finance Minister Zdravko Maric has expressed his satisfaction with Croatia's credit rating, as confirmed by the S&P rating agency recently, claiming that Croatia now looks good in the eyes of international financial circles.

As Gordana Grgas/Novac/Jutarnji writes, after the respected Standard & Poor's rating agency reaffirmed the Republic of Croatia's credit rating and its stable outlook on Friday, but also lowered its forecast for economic growth this year from 5 to 2.5 percent, and gave a higher estimate for inflation than the previous one, of about 6 percent, Minister Zdravko Maric appeared to be satisfied in his statement for the media.

He believes that Croatia has a good reputation and is looking better and better in the eyes of various international financial circles, and this is important because it is preparing an international bond issue, with the help of the latest S&P report. As the circumstances on the international markets aren't the most favourable at this moment in time, he said, the realisation will be timed "when the best moment comes".

S&P raised Croatia's investment rating (BBB- / A-3) back in March 2019 and hasn't changed it since. Its possible increase, they mentioned, could be influenced by joining the Eurozone, a major political move which is set to occur next year.

According to Minisrer Zdravko Maric, the government will publish its latest official macroeconomic projections for this year in April, and he said that inflation has become one of the most important and noticeable macroeconomic indicators of our times.

"Inflation stood at 5.7 percent in January and at 6.3 percent in February. We expect this trend of accelerating inflation to continue in the first half of the year due to the base effect, and then a lot will depend on all of the other factors influencing this inflation. First of all, these are the prices of energy and food, but also the circumstances related to geopolitical and geostrategic events," said Maric, noting that these same circumstances affect the current forecast of Croatian GDP growth.

He said he was very pleased that the S&P report "recognised the government's efforts to improve the absorption of European Union (EU) funds, both from the Multiannual Financial Framework and the EU's New Generation,'' as well as to mitigate negative demographic trends through various measures and tax policies.

Regarding the implementation of the NPOO, he assessed that it is going very well and that Croatia had fulfilled everything it needed to by the end of last year, and then sent a report for evaluation to Brussels and expects an additional tranche of 700 million euros to be paid out in June.

For more, check out our politics section.

Wednesday, 9 March 2022

Croatian GDP Growth Among Strongest in EU at End of 2021

March the 9th, 2022 - Croatian GDP growth in the fourth quarter of last year is more than impressive, placing the country among the European Union (EU) member states with the strongest such growth of all.

As Poslovni Dnevnik writes, the Republic of Croatia is among the EU countries with the highest annual GDP growth rate in the fourth quarter of 2021, ranking behind Ireland and Malta and soaring well above the European average, new Eurostat estimates revealed this week.

The EU's seasonally adjusted gross domestic product (GDP) rose 0.4 percent in the fourth quarter of 2021 compared to the previous three months, when it increased 2.2 percent, Eurostat confirmed in its February estimate.

The Eurozone's GDP grew 0.3 percent when compared to the third quarter, when it rose 2.3 percent.

Compared to the same period a year earlier, the seasonally adjusted GDP of the EU as a bloc and the Eurozone increased by 4.8 and 4.6 percent respectively. It rose 4.1 percent in the EU and 3.9 percent in the Eurozone in the previous quarter.

Activity in both the EU and the Eurozone exceeded pre-pandemic levels from back at the end of 2019, by 0.6 and 0.2 percent, respectively, Eurostat determined on the basis of seasonally adjusted data. Throughout 2021, activity in both areas rose 5.3 percent, 0.1 percentage point stronger than Eurostat estimated back in mid-February.

Neighbouring Slovenia is at the helm...

At the annual level, all EU countries form which Eurostat obtained data recorded GDP growth in the fourth quarter of 2021, and the strongest was in neighbouring Slovenia, where it amounted to 10.5 percent.

The Slovenes are followed by Malta and Ireland with a 10 percent increase in activity, and Croatian GDP growth also places it in this group, where it grew by 9.9 percent, after a 15.3 percent jump in the period from July to September. The weakest growth among the countries with Eurostat data was recorded by Slovakia, with 1.2 percent, and Germany is close with a growth rate of a mere 1.8 percent.

Among the countries whose data were available to Eurostat, GDP in Slovenia grew the most on a quarterly basis in the fourth quarter of last year, by 5.3 percent, followed by Malta with 2.3 percent growth and Spain and Hungary, where GDP grew by two percent in both countries.

A decline in activity was recorded in Ireland, by 5.4 percent, in Austria, by 1.5 percent. The same also fell slightly in Germany, by 0.3 percent, and here in Croatia, Latvia and Romania, that fall stood at 0.1 percent. In the third quarter of last year, Croatian GDP growth stood at 1.4 percent on a quarterly basis.

Decreased employment

The number of employees in the EU and the Eurozone increased by 0.5 percent in the last three months of last year compared to the summer quarter, when it increased by 0.9 and one percent, respectively. Compared to the end of 2020, it increased by 2.1 percent in the EU and by 2.2 percent in the Eurozone. Between July and September, it rose 2.1 percent in both areas.

Recovery in Croatia...

Employment in Hungary, Denmark, Malta and Spain accelerated the most on a quarterly basis, ranging from 1.2 to 1.0 percent. Here in Croatia, the number of employees increased by 0.6 percent in the fourth quarter of last year compared to the previous quarter, when it fell by 0.1 percent. On an annual basis, the number of employees in Ireland increased by the most, by 8.4 percent.

When it comes to the growth in the number of employees at the end of last year by 3.6 percent compared to the same period back in 2020, Croatia is equal to Greece, Luxembourg and Malta. In the third quarter, the number of employees in Croatia increased by 1.7 percent on an annual basis. Only Romania saw a 9.1 percent drop in registered employee numbers.

For more, check out our lifestyle section.

Monday, 28 February 2022

Might SWIFT Exclusion of Russians Also Harm Some Croatian Enterprises?

February the 28th, 2022 - The European Union and powerful non-EU European countries such as the United Kingdom have imposed some of the harshest possible sanctions on Russia following its unjustified invasion of Ukraine just a few days ago. The exclusion of Russia from the SWIFT system is among the harshest, but could it have negative effects for Croatian enterprises as well?

As Jutarnji/Novac/Vedran Marjanovic writes, Croatian consultant Goran Saravanja explained that Russia's exclusion from SWIFT is primarily aimed at financially depleting the Russian Federation, hindering the international trade of the Russian economy, its exports, but also the import of what it lacks. Economist Drago Jakovcevic, however, warned that Croatian enterprises will also suffer as a result of the move, for example, in the form of the collection of goods delivered to Russia.

How the expected expulsion of Russia from the international SWIFT system for financial transactions will be seen in practice remains to be seen, but the consequences will certainly be borne by Croatian enterprises which have to charge for their exported goods to Russia.

''The exclusion of Russia from SWIFT is certainly a fair measure towards Russia, because such aggression against one country, as Russia has undertaken against Ukraine, has not been seen since World War II. This is the least that can be done out of solidarity with Ukraine,'' Jakovcevic said in reference to the decision of the United States and its allies here in Europe to expel Russia from the SWIFT system.

The full name of the SWIFT system is the Society for Worldwide Interbank Financial Telecommunication and it serves commercial banks and other financial service providers as a communication platform and not, as can often be heard, as an international payment system. The expulsion of Russia from SWIFT means that for all those who do business with Russia, business operations will be much more difficult, expensive and uncertain. This includes a list of Croatian enterprises which are now in difficult circumstances.

''The announced exclusion of Russian banks from the SWIFT system is part of a package of sanctions that the EU, the UK and the US have already imposed or intend to impose on Russia, so the decision in relation to SWIFT should be viewed in this context,'' commented consultant Goran Saravanja, adding that that context is the financial depletion of Russia.

''We can see that energy and food are currently excluded from Russia's sanctions, as resources that can be imported from that country. If we talk about the effects of excluding a country from the SWIFT system, we should take into account the fact that Russia isn't actually the first country to have this happen to them, one other example is Iran. And as we know, even after being expelled from SWIFT, Iran continued, for example, to export oil, recording, however, a significant drop in revenue,'' Saravanja noted.

Drago Jakovcevic pointed out that the expulsion of Russia from SWIFT, which is imminent, will not only affect Russian banks, but also companies and regular residents of that enormous country.

''Pulling Russia out of SWIFT has the function of discouraging it, making it more expensive and making doing any business with Russia much more difficult. Apart from Russia's economic and financial isolation, its exclusion from the SWIFT system has the function of preventing those in the rest of the world who are now preparing to make money from the devaluation of the ruble from doing so,'' Jakovcevic pointed out.

In support of the statement is the statement of former Russian Finance Minister Alexei Kudrin that the expulsion from SWIFT could cost Russia a drop in its GDP by five percent a year. Kudrin made the statement during one of the previous announcements of the USA and its allies that Russia would be expelled from SWIFT, but that the move was very appropriate for the current moment since the SWIFT blockade is just one form of the latest portion of sanctions against Moscow for attacking Ukraine.

For more on Croatian enterprises, check out our business section.

Saturday, 26 February 2022

Croatian Inflation: CBS Announces Highest Price Increases in 13 Years

February the 26th, 2022 - The Central Bureau of Statistics (CBS) has announced that Croatian inflation is resulting in the highest price increases in thirteen years, with no improvement on the horizon to speak of as the Eurozone experiences the same, energy prices continue to soar and Russia invades Ukraine.

As Novac/Jutarnji/Gojko Drljaca writes, the Central Bureau of Statistics (CBS) finally released Croatian inflation data for the month of January 2022 on Thursday, which went unnoticed due to the horrendous and unjustified Russian attack on Ukraine, although prices did continue to rise significantly. In January 2022, prices were 5.7 percent higher than in the same month back in 2021.

However, despite the somewhat longer wait for Croatian inflation data compared to more advanced countries, new CBS statistics confirmed what we already suspected in January: the key cause of rising prices across Croatia is now not only the sky high global energy prices but also transport prices (growth in January +10.8 percent), food and non-alcoholic beverages (+9.4 percent), alcoholic beverages and tobacco (+6.2 percent), furniture, household equipment and household maintenance costs (+5.0 percent) and at restaurants and hotels (+ 4.7 percent).

Of particular concern is the data on rising food and non-alcoholic beverage prices and transport, as these are costs that the poorest of the country's families and households cannot avoid at all. The same is a growing concern in regard to housing, water and electricity costs, which rose by a significant 2.7 percent in January alone. It is now obvious that an inflationary spiral is being created here in Croatia, as it is in other European Union (EU) member states.

On a monthly basis, the highest growth of 2.9 percent was recorded in food and non-alcoholic beverages. The only significant drop in prices as Croatian inflation causes more and more worry was recorded in the group of clothing and footwear (-12.9 percent), which indicates possible problems being experienced by that business. Namely, it seems that some consumers with lower purchasing power must already be planning to give up.

Although the data being released by official bodies on Croatian inflation is beginning to sound a bit dramatic, the Croatian economy is still right in the middle of the EU inflation average, which offers a certain degree of comfort. In January in the EU, the highest inflation was recorded in the Czech Republic (+8.8 percent), Estonia (+11 percent) and Lithuania (+12.3 percent). The most stable prices could be found in Sweden (+3.9 percent), Portugal (+3.4 percent) and France (+3.3 percent).

Given that the Republic of Croatia is one of the poorest member states of the EU, even average European Union inflation will be a significantly bigger economic and social problem for it, because both theoretical and empirical price increases hit the poorest the hardest. Of particular concern is the fact that the war in Ukraine will certainly have a pro-inflationary effect across all EU member states.

Eurostat officially released Croatian inflation data on February the 17th, with projections released in the first week of February. It is unclear whether, after entering the Eurozone, the CBS will adjust to the speed of other statistical institutions across the European Union.

For more, check out our lifestyle section.

Wednesday, 23 February 2022

Support for Large Croatian Companies Amid Energy Crisis Being Sought

February the 23rd, 2022 - The Croatian Chamber of Commerce (HGK) is seeking aid for large Croatian companies as well as for micro, small and medium enterprises as the energy crisis continues.

As Poslovni Dnevnik/Marija Brnic writes, the state of emergency for the Croatian Government will likely leave even less room for negotiations on the possible "inclusion" of large Croatian companies in the package of assistance measures which entrepreneurs are seeking through the Croatian Chamber of Commerce (HGK) even after its presentation last week.

There is a little more than a month left until the start of the implementation of the recently revealed government inflation measures worth almost five billion kuna in total, during which the criteria and methods of obtaining aid should be determined, intended - when it comes to entrepreneurs - primarily for micro, small and medium enterprises. Large Croatian companies appear to have been somewhat left out in the cold.

The Croatian Chamber of Commerce believes that the aforementioned package of inflation measures should be expanded and should include large Croatian companies that have a high share when it comes to their number of employees, as well as their exports and revenues. Otherwise, they say, those companies with a large number of employees and industrial plants with high energy consumption will hardly be able to overcome the impact of the price increases that have and will continue to hit them.

The measures as they stand today envisage subsidies for smaller companies in the amount of 15 lipa per kWh for those with a consumption of up to 10 GWh, and it is planned that 600 million kuna will be made available for vouchers from this measure by the end of March next year.

The Croatian Chamber of Commerce has called on its members to take measures to reduce energy costs for all end users and help companies and industries overcome problems caused by rising prices, and many of them have introduced measures for all consumer groups, thus including large and energy-intensive companies.

Examples of quality measures include Belgium, which has banned unilateral changes to contracts whereby energy distributors and suppliers can increase prices on their own in fixed-price contracts, and in nearby Italy, which abolished network charges in the first quarter of 2022. Italy also reached for a 20 percent tax cut on its large consumers for energy purchased and consumed in the first quarter.

"Following these measures, the members of the Croatian Chamber of Commerce proposed the abolition or reduction of tariff items where possible, or to at least keep them at the same level until the market stabilises," said the Croatian Chamber of Commerce, noting that it is crucial for industrial consumers to have stability in their contracts within the gas year, ie contracted fixed prices.

One of the solutions that can help this category is to reduce the amount of income tax liability by up to 50 percent of the value of investments in renewable sources, retroactively According to their proposal, the compensation for the reduction of the tax liability could be used for a period of four financial years.

For more, check out our business section.

Saturday, 19 February 2022

Company Owners Say Croatian Inflation Measures Can't Come Soon Enough

February the 19th, 2022 - The set of Croatian inflation measures which were revealed just this week and which aren't due to come into force until April the 1st this year have many companies with increasing bills biting their nails. For many, it isn't being dealt with quickly enough.

As Poslovni Dnevnik/Marija Brnic writes, while it's excellent that the government has recognised the spirit of the economy and the level of damage that can be caused by rising energy prices, this is only a rough framework and much will depend on how the implementation of Croatian inflation measures is defined and organised.

As such, the Croatian Government's package of measures to alleviate inflationary pressures was commented by Ivan Miloloza, the owner of Munja, one of the companies that has been seriously affected by the multiple increase in gas prices.

As presented by Prime Minister Andrej Plenkovic, the Croatian inflation measures are a package which is quite comprehensive, it has a wide range when it comes to how much of society it will cover, as it does for products for which VAT will be reduced. On top of that, there's a lot of assistance provided for enterprise owners and businessmen, who, just like ''normal'' people, will receive vouchers for covering part of the cost of gas, while farmers will receive support for the purchase of mineral fertilisers.

The total value of the package of Croatian inflation measures stands at a massive 4.8 billion kuna, and the largest part refers to households. Measures for the economy, according to the government, had to be of small value, and couldn't be targeted, for example, at gas suppliers, because what's been built into this package is possible only according to European Commission (EC) rules. These Croatian inflation measures will take effect on April the 1st.

The application coincides with the end of the winter season, so the government expects that the effect will be to maximise the impact on household budgets and preserve purchasing power, and thus contribute to the continuation of the trend of recovery and competitiveness of the domestic economy.

For those deeply affected by the drastic rise in gas prices, the word on everyone's lips now is just how the use of fuel/gas vouchers will look in practice. The realisation was announced through Hamag-Bicro, where they have no more information, but at the presentation it was said that the application of measures will not be retroactive. This is exactly what received the most negative assessments from business owners, especially from those who own smaller companies, whose gas costs exploded on November the 15th last year, increasing anywhere between three and seven times.

"This ordeal isn't going to end just because of this announcement, we won't be breathing a huge sigh of relief come April the 1st,'' they said from one of the enterprises from this affected group of company owners.

Micro, small and medium enterprises, with an annual consumption of up to 10 Gwh, will be able to count on coverage of up to 15 lipa per Kwh, and the subsidised amount will be deducted from their vouchers every month until March the 30th, 2023.

According to the government's estimate, about 600 million kuna will be needed for these Croatian inflation measures, and it should cover 99 percent of companies in that group. The largest consumer of gas in the economy, Petrokemija, will not be able to use this measure, but will partially feel the relief of the burden due to price shocks by the covering of the costs of farmers, who will receive subsidies for the purchase of mineral fertilisers.

They can count on subsidies of up to 20 hectares of agricultural land, for the first 10 hectares the price will be 450 kuna per hectare, and for the remaining ones - 250 kuna. These Croatian inflation measures are expected to cover about 88,000 farms across the country, and 200 million kuna is planned for the measure.

And for fishermen, about 2000 of them, 50 million kuna of support for the costs of blue diesel has been provided. The Croatian Chamber of Agriculture will discuss the measures in more detail as we move forward, but President Mladen Jakopovic expects that some producers will still be left somewhat dissatisfied. He also hopes that the Ministry of Agriculture will show some additional sensitivity to production, especially when it comes to livestock.

Farmers and producers are positive about the reduction of VAT on a number of products, and this regime includes gas and heat, for which the rate will be permanently reduced to 13 percent, the same amount as for electricity, while from April the 1st 2022 to March the 31st 2023, VAT on gas will be reduced by 5 percent.

The catering sector is hurt by the fact that coffee, tea and juices are not included in the list of food items which will have VAT reduced, which they have been asking the government to do for a long time now.

Reactions were immediately fueled by skepticism and the expectation that lower VAT would not be felt on final product prices. HOK pointed out that, since the package of Croatian inflation measures comes into force in a month and a half only, the question remains as to what extent a reduction in the prices of products and services can even be expected, given that a large number of business owners are already suffering damage.

The Prime Minister could only state that the government has taken the first step, and has called on everyone in the chain to show solidarity and not use the opportunity for profit, and he said that the engagement of consumer protection associations will now be important. HUP CEO Damir Zoric also called on customers to shun those who don't show solidarity in fighting rising inflation.

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

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