Friday, 30 October 2020

Croats Increase Savings by HRK 11 Bn in Past Year

ZAGREB, October 30, 2020 - Over the past year, Croatian citizens increased their savings by HRK 11 billion despite the pandemic and a weaker tourism season, with saving deposits across Croatia totalling HRK 52,784 per capita, the Chamber of Commerce (HGK) said on Friday ahead of World Savings Day.

Citing central bank data, the HGK said household deposits reached HRK 214.9 billion in August, up 5.4% on the year.

Across Croatia, deposits per capita amount to HRK 52,874, above last year's average of HRK 48,626, ranging from HRK 23,443 in Vukovar-Srijem County to HRK 78,681 in Istria County.

People on the coast, and partly in Zagreb, save based on tourism, which is why this year's disappointing season has changed some trends. 

Year on year, deposits increased in every county bar Osijek-Baranja, but those in continental Croatia increased by 7.5% and those along the coast by 2.5%. This, the HGK said, shows that the weaker tourist season resulted in weaker deposits in the coastal counties.

Interestingly, deposits along the coast increased less than in 2019, whereas in continental Croatia the growth rate was above the national average, the opposite of last year.

Central bank economist Vedran Sosic said there were no household saving estimates in Croatia, i.e. estimates of the part of one's income that is not spent, so they are based on trends in the value of financial assets and bank deposits as their biggest component.

(€1 = HRK 7.5)

Monday, 28 September 2020

HGK Head Calls for More Flexible Labour Legislation

ZAGREB, Sept 28, 2020 - Croatian Chamber of Commerce (HGK) head Luka Burilovic said on Monday that Croatia needed more flexible labour legislation that would put emphasis on teleworking and the possibility to lay off workers more easily than was now the case.

Organising remote work in a better manner and flexibilities employment contracts are to be regulated by the new law, on which Labour Minister Josip Aladrovic and 35 Croatian business people presented their views at a meeting organised by the HGK in Zagreb.

The business people and the minister said they also expected issues to be raised such as government support for the business sector during the coronavirus epidemic, a non-working Sunday, and the minimum wage for next year, which should be determined by the end of October.

"The new law should put emphasis on remote work and the possibility to lay off workers more easily. I do not think that good worker should be laid off, but there must be greater fluctuation," Burilovic said before the meeting.

Croatia lost only 18,000 jobs due to pandemic

Burilovic said that owing to the measures taken, Croatia had lost only 18,000 jobs to the coronavirus pandemic but that the manufacturing and textile industries would need additional help.

Minister Alandrovic recalled the government's aid for a shorter working week, measures for small business owners, and those for job retention, noting that the government was not against well-substantiated proposals and would continue supporting the business sector.

The head of the KTC retail chain, Ivan Katavic, called on the government to regulate the issue of non-working Sunday, dismissing speculation that a ban on Sunday trading would result in the dismissal of 23,000 workers and a drop in GDP.

Katavic said that 97% of domestic retailers were in favour of a non-working Sunday but that foreign-owned retailer was against it and called for a consensus on the matter.

Dario Vukadinovic, president of the association of road and cargo transporters at the HGK, called for making the labour market more flexible while retaining "a certain level of social security."

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Sunday, 30 August 2020

HGK: New Measures Final Nail in Coffin for Croatian Congress Tourism

As Morski writes on the 29th of August, 2020, the unexpectedly good results of the tourist season in July and August unfortunately don't apply to Croatian congress tourism. Congress organisers and travel agencies have fared terribly during the coronavirus crisis. 

The Croatian congress tourism industry realises its income almost exclusively in the pre- and post-season, which means that in the most intensive period for this industry, the spring months, operations were entirely prohibited, and given the latest measures, the same will happen in once again in autumn.

''Yesterday's decision of the National Civil Protection Headquarters, which was sent to all health institutions and which postpones the holding of congresses, symposia, workshops, lectures and other forms of professional training for health workers, is actually the final nail in the coffin for Croatian congress tourism,'' warned Jasmina Kanas, president of the Croatian Business Tourism Association of the Croatian Chamber of Commerce (HGK).

She claims that gatherings of the medical community make up the majority of all such gatherings in Croatia. "In our organisation, health protocols can be fully respected, and the participants are those who are used to applying much stricter anti-epidemiological measures because their jobs depend on doing so. They can't be compared to similar public gatherings because this is education with a special emphasis placed on professional development and knowledge exchange where there is no place for entertainment. This is especially true for medical gatherings which, according to a strict codes of ethics, aren't allowed to engage in entertainment or have it in a very limited scope,'' she explained.

However, the HGK Association points out that they aren't blaming anyone and that everyone understands the current difficult epidemiological situation and the implementation of measures.

''We're aware that various events are the first target when measures are taken. But we hope that there will be equal understanding on the part of the government, given that our revenues this year are zero kuna as a direct result of these anti-epidemiological measures. So, this year we're not allowed to earn money on our own and get away from the burden of the state, and we aren't used to living on help,'' continued Kanas, adding that she believes that they cannot be treated in the same manner as others.

"We'll feel all this for years to come because employee education, team building programmes, incentives and business travel are the first cuts companies make in a recession even without there being a health risk. After the recession back in 2008, the recovery of Croatian congress tourism took almost five years,'' added Kanas.

In addition to the measures for jobs that they expect in the same amount of 4,000 kuna, which have so far "kept their heads above water", this community from the Croatian Chamber of Commerce is proposing additional grants in the amount of, for example, 10 percent of the turnover in 2019 compensated to congress organisers, given the fact that a similar move was made in Denmark. The uncertainty posed by the impossibility of determining when the pandemic will end is greater with the fact that measures to support job preservation are defined from month to month, making it impossible to plan a long-term strategy to overcome this unprecedented crisis. Therefore, they hope that the next decisions made by the Croatian Government will go in the direction of adopting CES measures until April 2021.

The Croatian congress tourism industry and all business travel in general are an extremely important segment of the country's tourism, but also of the overall Croatian economy because its consumption and long-term stability is a significant generator of inflows to domestic hotels, congress centres, restaurants and transport companies, all of which are among the most affected by this pandemic. The average delegate spends significantly more on professional training than typical tourists do, sometimes up to 5 times more, so the loss of income from this type of tourism is all the more damaging.

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Wednesday, 19 August 2020

HGK Warns Of Difficult Situation In Meat Industry

ZAGREB, Aug 19, 2020 - The slaughter and red meat processing group in the Croatian Chamber of Commerce (HGK) on Wednesday warned of the difficult situation in that sector and called for the continued support from the state, noting that it was high time for the industry to be declared a strategic priority for the country.

"The pressure of cheap imports has for years been suffocating Croatia's slaughterhouse and meat processing industry and the coronavirus crisis has added to the pressure on local companies in that sector, the majority of which, closed their slaughterhouses even before these turbulent times," the HGK said in a press release.

The president of the group of companies in this sector, Mario Ravlic, underlined that Croatian producers had found themselves in a difficult situation after Croatia joined the EU and fully opened its market to large European systems capable of production with significantly better conditions and that the most recent situation had additionally worsened that.

"The impact of the coronavirus crisis, loss of revenue from the sale of hides, and increased costs of managing by-products has brought the domestic meat processing industry to the very edge. And other challenges that await us could mean the end. In other words, it is high time for this industry to become a strategic state priority," said Ravlic.

HGK supported its arguments about the poor situation in this industry with foreign trade figures. Prior to joining the EU (2012), Croatia imported around 80,000 tones of various meat and around 10,000 tones of meat products whereas last year it imported 150,000 tonnes of meat and 24,000 tonnes of meat products.

Ravlic called for the state to urgently secure the continuation of state support for this sector.

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Monday, 27 July 2020

Bookings for Family Accommodation Down Despite Price Cuts - Survey

ZAGREB, July 27, 2020 - Despite lower prices, tourist accommodation for families in Croatia is seeing a steep decline in bookings and most providers of such accommodation are facing financial losses of up to HRK 50,000, a survey on the coronacrisis impact on the business operations of family accommodation providers shows.

The survey, conducted by the Croatian Chamber of Commerce (HGK) on a sample of 2,100 people, revealed that as many as 95 percent of respondents reported a decline in the number of bookings compared with last year, despite the fact that three-quarters of them had cut prices, mostly by up to 30 percent.

Nearly a third of those interviewed, or 31 percent, recorded a drop in bookings of more than 80 percent, while 90 percent also reported cancellations of bookings. The share of cancelled bookings for July and August was mostly up to 60 percent.

"The financial damage suffered by most of the accommodation providers, 77 percent, reached up to HRK 50,000 in the first six months of the year, while the estimate for the next three months climbs to HRK 100,000," the HGK said on Monday, noting that only six percent of the respondents said they did not have any significant financial losses.

A third of those interviewed were pensioners, with 75 percent of them saying that their livelihood would be threatened without this income.

Friday, 17 July 2020

HGK to Cull Staff by 30%

ZAGREB, July 17, 2020 - The Croatian Chamber of Commerce (HGK) said on Friday it was continuing its business reorganisation which includes downsizing staff by 30 percent.

"Due to the digitisation of internal processes and the fall in revenue caused by the coronavirus pandemic means, HGK is embarking on the next stage of reorganisation which means reducing the number of employees by 30 percent," HGK said in a press release.

HGK recalled that since Luka Burilovic took the HGK's helm the focus has been on reorganising business and improving efficiency to cater to the members' needs.

"Digital transformation, which we started two years ago, started not only with the Digital Chamber as a final product but also with the digitisation of internal processes which imply reducing the number of employees. Notably, digital transformation was one of the preconditions to rationalise and reorganise the Chamber which we planned to implement gradually, however no one could have foreseen the corona crisis," Burilovic said.

He underscored that like everyone else they had to adjust overnight to the new reality which is being felt the most by Croatian enterprises and consequently by all of Croatian society.

"As a result we have decided to embark on the next phase of reorganising the HGK which, unfortunately means reducing the number of employees by 30 percent. It's never easy to decide to lay anyone off but that is inevitable," said Burilovic.

HGKL currently has slightly over 500 employees. 

Sunday, 14 June 2020

Croatian Chamber of Commerce Seeks Lifting of Construction Ban in Summer

As Novac writes on the 11th of June, 2020, the Croatian Chamber of Commerce (HGK) has asked the Ministry of Construction and Physical Planning to send a recommendation to the local self-government unit on lifting the ban on construction works during the summer.

"We sent the request on behalf of construction companies whose working conditions were significantly hampered by the coronavirus crisis. During the pandemic, the Croatian Chamber of Commerce managed to prevent construction sites from closing and to open shops for construction materials and equipment as soon as possible, which preserved activity and jobs in this industry. The complete cessation of all earthworks and construction works would make it difficult to recover and realise the scheduled works, which would cause additional financial damage and consequently lead to the dismissal of a large number of workers,'' said Mirjana Cagalj, vice president of the Croatian Chamber of Commerce for construction, transport and communications.

According to the current Construction Act, cities and municipalities can make decisions on banning works, but the Construction and Utilities Sector of the Croatian Chamber of Commerce says that exceptional conditions have been met due to the coronavirus pandemic and that the necessary approvals and consents of local authorities must allow activities within this sector to continue.

"Lifting the ban would significantly help the construction sector and its related branches, and at the same time, it wouldn't seriously endanger the tourist season, which will be somewhat more modest due to objective reasons," explained Cagalj.

On behalf of the construction companies located in Split-Dalmatia County, the Croatian Chamber of Commerce also sent a letter to the Mayor of Split, Andra Krstulovic Opara, requesting that earthworks and construction works be allowed in the city throughout the summer (from June the 15th to September the 15th).

Opara supported the proposal and invited all interested investors and contractors to send their requests for the continuation of construction work during the summer months so that he could submit them to the City Council for discussion.

"At this moment in time, I consider it extremely important that the investments that can start the economy the most quickly are enabled and encouraged, so, I'm going to recommend a positive solution to all of the received requests to the Council," Opara said.

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Thursday, 11 June 2020

HGK Launches Platform for Virtual Meetings Between Business People

ZAGREB, June 11, 2020 - With the support of the Enterprise Europe Network, the Croatian Chamber of Commerce has launched "Go global - Go virtual", a project aimed at expediting the recovery of the domestic economy after the COVID-19 crisis, the HGK said on Thursday.

It concerns the organization of online B2B meetings for Croatian companies with foreign partners on markets in which Croatian business people, according to a survey, are most interested - Slovenia, Russia, Austria, Germany, the Czech Republic, Slovakia, Poland, and Hungary.

The first virtual meetings will be organized with business people from Slovenia, Ivan Barbaric of the HGK said. Croatian companies may apply for them by June 19 and the meetings with Slovenians will take place on July 2.

Monday, 8 June 2020

HGK: 2019 One Of Best Years For Investment Funds

ZAGREB, June 8, 2020 - Last year was one of the best years for investment funds with the value of their assets exceeding HRK 26 billion and this year despite the obvious fall due to the COVID-19 pandemic. the sector has been significantly maturing, it was said at the Top of the Funds award ceremony on Monday.

President of the association of companies for the management of investment funds within the Croatian Chamber of Commerce, (HGK) Hrvoje Krstulovic underlined that 2019 was one of the best years for investment funds and capital market with Undertaking for Collective Investment in Transferable Securities (UCITS) funds increasing by 18.5% to HRK 22.5 billion and a jump in alternative investment funds of 14.5%  to HRK 4.2 billion.

Those two figures, combined together, give the number of HRK 26.8 billion which is almost equal to the value of assets at the end of 2007, said Krstulovic.

Despite the crisis in 2020, 95% of physical entities retained their investments in funds, he explained and the decrease that has been recorded mostly relates to institutional investors, he said.

He underlined that a significant maturity has occurred in the entire sector from clients, to sales processes and on to regulators.

The strongest effect of the coronavirus epidemic was recorded in March when the value of assets of investment funds fell by 30% however in April an increase of 1.4% was recorded and the total value of UCITS funds at the end of April amounted to HRK 15.9 billion.

Top of the Funds awards in five categories

The Top of the Funds awards for the best management of investment funds in 2019 was conferred to Intercapital Bond for the best equity open-end investment fund (UCITS) while the best mixed open-end investment fund award went to Allianz Portfolio. The best open-ended investment fund was awarded to PBZ Equity while the particular open-ended investment fund award went to Intercapital Income Plus.

There are currently 23 companies managing investment funds in Croatia.

Saturday, 6 June 2020

HGK: Croatia Meeting Conditions For Entry To Euro Area As Planned

ZAGREB, June 6, 2020 - Findings of the ECB's assessment showing that all the major commercial banks in Croatia have met capital adequacy requirements and passed stress tests means that Croatia is a step closer to the European Exchange Rate Mechanism (ERM II), the Croatian Chamber of Commerce (HGK) said on Friday.

Therefore we can expect the country to join the euro area in 2023, as planned, the HGK says in a press release after the Croatian National Bank (HNB) stated that the comprehensive assessment conducted by the European Central Bank showed that the five leading banks in Croatia are well-capitalized and resilient to shocks.

Zagrebacka banka (ZABA), Privredna banka Zagreb (PBZ), Erste & Steiermaerkische Bank, OTP banka Hrvatska and Hrvatska Postanska Banka (HPB), which were covered by the comprehensive assessment conducted by the ECB, do not face any capital shortfalls as they did not fall below the relevant thresholds used in the asset quality review (AQR ) and the stress test, the Croatian central bank reported earlier on Friday.

The findings are also the confirmation of the stability and good quality of the Croatian banking system, the chamber underlines in its comment.

This is also an act of recognition of our members from the banking system and of the whole economy, says the HGK.

The chamber reiterates some of the advantages of the membership of the euro area such as the access to funding through the European Stability Mechanism, the fact that the HNB would no longer have to maintain the stability of the kuna, and the consequent higher credit ratings for the country.

Banks covered by ECB assessment make up four-fifths of total banks' assets in Croatia 

The five banks that fared well in the ECB comprehensive assessment make up 79% of the total assets of the banking system, the HGK notes.

Croatia sent its letter of intent to join the Exchange Rate Mechanism (ERM II) to the ECB on 4 July 2019.

The finance ministers of the euro area's 19 member states and Denmark, the president of the European Central Bank (ECB) and a representative of the Danish central bank's governor discussed the letter at a meeting in Brussels, after which the finance ministers issued on 9 July 2019 a statement in which they "welcome the intention of the Croatian authorities to put in place the necessary elements for a successful entry into ERM II."

The euro area statement said then that the ECB could complete its assessment of Croatia's compliance with the commitments outlined in the letter of intent in about a year's time.

In case of a positive assessment, a decision would be made on Croatia's ERM II participation, a sort of euro waiting area where it should spend at least two years, which means Croatia could introduce the euro in 2023 at the earliest.

Croatia would simultaneously join ERM II and the Banking Union.

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