Tuesday, 21 September 2021

Volume of Construction Work Grows For 14th Straight Month Y-O-Y

ZAGREB, 21 Sept, 2021 - The volume of construction work in July 2021 was 6.5% higher than in July 2020, however it fell by 4.9% compared to June 2021, the State Bureau of Statistics (DZS) reported on Tuesday.

July was the 14th month in a row for the volume of construction work to increase on the year.

DZS data indicate that the volume of construction work done on buildings in July was 5.3% higher y-o-y whereas the volume of other structures increased by 8.1%.

Compared to June the volume of construction work contracted by 6.2% on buildings and by 3% on other structures.

In July, 61% of working hours on construction sites were conducted on new structures while 39% were for reconstruction, repairs and maintenance.

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Thursday, 19 August 2021

Croatian Seaports Handle More Passengers and Cargo in Q2 2021

ZAGREB, 19 August, 2021 - The turnover of passengers at Croatian seaports in the second quarter of 2021 reaches 5.4 million, up 81.8% on the year and 41.9% more than in the same period in 2019, according to the national statistical office (DZS).

The port in Split recorded the highest number of passengers -- 739,970 -- which is 115.3% more than in the same period the year before.

The port in Zadar follows with 474,089 passengers or 63.8% more on the year.

Maritime freight increased by by 10.2% with Croatian ports handling 6.2 million tonnes of seaborne goods in the said period.

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Tuesday, 3 August 2021

Total Household Loans Reach HRK 138,9 Bn in June

ZAGREB, 3 Aug (Hina) - Total household loans in Croatia reached HRK 138.9 billion at the end of June 2021, increasing by HRK 4.2 billion from June 2020, according to the data provided by the Croatian National Bank (HNB).

The annual nominal household loan growth rate was 3.2%, picking up from 2.7% in May 2021, Raiffeisen Bank (RBA) said in its analysis of the central bank's data.

The share of kuna-denominated loans in total loans was 55%, the same as the month before.

Household credit claims increased by 1.9% or HRK 2.7 billion since the start of the year.

The annual household loan growth rate increased from 3.5% to 4%, with the growth of housing loans picking up from 9.7% to 10.1%. 

(€1 = HRK 7.5)

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Wednesday, 23 June 2021

Total Household Loans Reach HRK 137.5 Bn in April

ZAGREB, 23 June, 2021 - Total household loans in Croatia reached HRK 137.5 billion at the end of April 2021, increasing by HRK 3.6 billion from April 2020, Raiffeisen Bank (RBA) said in its recent analysis of data provided by the Croatian National Bank (HNB).

The annual nominal household loan growth rate was 2.7%, picking up from 1.6% in March 2021.

The share of kuna-denominated loans in total loans was 55%, and the nominal amount of loans was affected by the euro-kuna exchange rate, which was 0.4% lower on an annual level and 0.1% lower on a monthly level.

Compared with December 2020, household credit claims in April 2021 increased by 1% or HRK 1.35 billion as a result of a rise in the nominal value of housing loans and the impact of housing subsidy schemes on them.

Housing loans accounted for 46.4% of total household loans, reaching HRK 63.8 billion, up by 1.61 billion from the end of 2020. The annual growth rate picked up from 8.3% in March to 9% in April.

On the other hand, general-purpose cash loans, despite a slight monthly rise of 0.2% to HRK 52.5 billion, were 1.4% lower than in April 2020, while increasing by 0.5% compared with the end of 2020.

RBA analysts expect that the rise in household loans will continue this year on the back of subsidised housing loans and the need for funding for the reconstruction of housing damaged in last year's earthquakes.

With the easing of COVID-19 restrictions and the acceleration of economic activity, there will be an increase in demand for cash loans, but this year it will be more modest than two-digit growth rates seen between mid-2018 and the outbreak of the coronavirus pandemic, RBA said.

(€1 = HRK 7.5)

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Friday, 18 June 2021

Average Net Salary for April Increases to HRK 7,082

ZAGREB, 18 June 2021- Croatia's average net pay in April was HRK 7,082, which is an increase of 6.9% on the year in nominal terms and of 4.7% in real terms, according to data released by the national statistical office (DZS) on Friday.

Compared with March 2021, the average net wage was lower by 0.8% in nominal terms and by 1.5% in real terms.

The highest average monthly net salary per person employed in legal entities for April 2021 was paid in Extraction of crude petroleum and natural gas, amounting to HRK 11,652, and the lowest was paid in Manufacture of wearing apparel, amounting to HRK 4,361.

The average monthly gross salary in April 2021 was HRK 9,529, which is a decrease of 0.7% in nominal terms and of 1.4% in real terms compared to March. Compared to April 2020, the average gross pay was higher by 5.2% in nominal terms and by 3% in real terms.

For more on business in Croatia, follow TCN's dedicated business section.

Wednesday, 26 May 2021

Volume of Construction Work in March Up 16% Year-Over-Year

ZAGREB, 26 May, 2021 - The volume of construction work in March 2021 was 16% higher than in March 2020, while compared to the previous month, it dropped by 0.4%, show preliminary data from the Croatian Bureau of Statistics.

March was the tenth consecutive month with a year-on-year increase in the volume of construction work.

The volume of construction work on buildings in March this year was 16.5% up from March 2020 while the volume of work on other structures rose 15.3%.

Compared to February 2021, construction work on buildings in March was up 0.5% and on other structures it was 3.9% higher.

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Tuesday, 23 March 2021

Standard & Poor's: Tourism Vulnerable Point and Factor for Croatia's Economic Recovery

ZAGREB, 23 March, 2021 - Croatia's economic recovery from the pandemic recession hinges on the tourism sector's recovery, the Standard & Poor's agency said, assessing that recovery and protective mechanisms will offset the risks caused by the pandemic.

Croatia's economic recovery from the pandemic-induced recession is within reach as long as tourism picks up, S%P's said in its outlook released on Tuesday.

It recalled that Croatia's credit rating is 'BBB-/A-3', with a stable outlook.

Impact of COVID-19 pandemic blow to tourism

Croatia's economy is expected to expand by 5.1% this year, S&P's said in its latest outlook contracting Croatia's estimated GDP growth by half a percentage point.

In 2020, the country's GDP fell by 8.4% according to S&P's forecast, however this is 0.4% percentage points less than it had forecast in its autumn outlook in September.

In 2022 the economy is expected to grow by 3.5%, and by 2.6% in 2023 and 2024.

S&P considers that mass vaccination against COVID-19 is a precondition for economic growth which will relieve travel restrictions hence boosting tourism.

Tourism in fact has been affected the most by the pandemic, causing GDP to contract by more than 8% in 2020.

"This highlighted vulnerabilities due to Croatia being one of the most-tourism dependent sovereigns in Europe," S&P's said, adding that "despite prospects of a dynamic summer season, we assume that the tourism sector won't fully recover to the record pre-pandemic numbers over the coming two years." 

Strong protection mechanism

Even though this has left its mark on the balance of payments, Croatia still has strong protection mechanisms against potential external pressure with its high foreign reserves and its swap line with the European Central Bank.

Also, Croatia entered the pandemic period with an improved budget situation and the government could reach out to strong fiscal support measures to relieve the consequences of the pandemic on the labour market.

The budget deficit to GDP this year will amount to 2.9%, which is 0.1 percentage points better than the autumn outlook.

In 2020 the budget deficit amounted to 7.8% of GDP or 1.4 percentage points more than estimated last September.

Next year that deficit could be reduced to 2.0% of GDP and to 1.5% in 2023.

S&P's underlined Croatia's plan for "quick euro adoption is Croatia's key policy goal, after last year's entry into the Exchange Rate Mechanism (ERM II)."

Favourable financing conditions

Due to the pandemic, public debt jumped to a record 88% of GDP in 2020, "however, the government's debt profile benefitted from historically low funding costs and extended debt maturities."

This year it is expected to fall to 84.3% of GDP and below 80% again in 2024.

"We could lower the ratings on Croatia if, contrary to our expectations, external financing pressure was to build or if public finances failed to recover over the coming two to three years, pushing public debt up," S&P said.

The report recalls that Croatia is also entitled to ample EU funds under various envelopes including Next Generation EU and the Recovery and Resilience Facility in the coming years, which will probably contribute to economic recovery.

Additional support should be available for reconstruction efforts following the earthquakes that hit Zagreb in March 2020 and Sisak-Moslavina County in December 2020.

"Net inflows from the EU budget could also support fiscal buffers without unduly constraining investments, which underpins the importance of efficient preparation and the absorption of available funds," S&P's report notes.

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Friday, 19 March 2021

Croatian National Bank: "45% of Croatia's Citizens Support Euro Adoption"

ZAGREB, 19 March, 2021 - The percentage of Croatian citizens who support the adoption of the euro in February this year has reached 45%, up by four percentage points from 41% in a previous survey, conducted in March 2020, the Croatian National Bank (HNB) said on Friday.

The fourth public opinion poll on the adoption of the euro was carried out for the HNB by the Ipsos agency from 23 February 2021 to 1 March 2021.

Nineteen percent of citizens are against the adoption of the euro, while 26% are either against or in favour depending on other factors, and 10% of the respondents do not know, the HNB said.

Also, they said, an increasing number of citizens think that the effect of the euro will be positive. Some of the advantages they see include easier payment and business, as well as the fact that the euro is the common currency in the euro area, which would make Croatia equal to other members of the monetary union.

On the other hand, they see a decline in the standard of living and purchasing power as the main risk, and over a third of citizens think that the adoption of the euro will further increase prices.

To date, the poll has been carried out four times: in August 2018, in February 2019, in March 2020 and in February 2021. The survey is conducted on a nationally representative sample of 1,000 respondents, aged 18 to 79, using computer-assisted telephone interviewing (CATI), and it covers four thematic units: the use of the euro in the Republic of Croatia by foreign citizens, how informed citizens are on the adoption of the euro, citizens' attitudes to the adoption of the euro and their expectations.

The aim of the survey is to determine whether Croatian citizens support the strategic commitment of the government and the HNB to adopting the euro as the official currency in Croatia and whether they are aware of all the benefits that the adoption of the euro will bring to them and the national economy.

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Thursday, 18 March 2021

Croatia Among 4 EU Countries with Decreases in Hourly Labour costs at end 2020

ZAGREB, 18 March, 2021 - In the fourth quarter of 2020, hourly labour costs rose in the EU and euro area at rates that were almost twice as high as in the previous quarter, while Croatia was again among the countries that recorded declines, a Eurostat report shows.

In the 27-member EU, hourly labour costs increased by 3.3% in the fourth quarter of 2020 compared with the same period in 2019. In the third quarter, they increased by 1.8%.

At the same time, hourly labour costs in the euro area were 3.0% higher than in the last quarter of 2019, following a 1.6% increase in the third quarter.

The higher labour costs reflected a rise in the costs of hourly wages and salaries, while the non-wage component moderated the growth in hourly labour costs, in particular due to the tax reliefs and subsidies granted by EU governments to support enterprises affected by the coronavirus crisis.

In the EU, the costs of hourly wages and salaries increased by +3.7% in Q4 2020, following a 2.4% rise in Q3. In the euro area, the costs of wages and salaries per hour worked grew by +3.5%, after a 2.2% increase in the third quarter.

In the EU, in the fourth quarter of 2020 compared with the same quarter of the previous year, the economic activities that recorded the highest increases in wage and salary costs were "Arts, entertainment and recreation" (+11.0%) and "Accommodation and food service activities" (+10.2%)

The non-wage component increased by 1.8% in the EU and by 1.5% in the euro area, following stagnation in the previous quarter.

The largest increases in hourly labour costs were recorded in Austria (+11.6%) and Bulgaria (+10.0%), while the lowest increases were observed in Hungary (+0.7%) and France (+0.3%).

Croatia, along with Ireland, Malta and Finland, had lower hourly labour costs in the fourth quarter of 2020 than in the same period in 2019. Ireland observed the largest decrease in hourly labour costs, of 4.8%.

in Croatia, hourly labour costs in Q4 2020 were 1.1% lower than in Q4 2019, while in Q3 they fell for the first time in four years, by 0.6%. In the fourth quarter, wage and salary costs fell by 0.2% and the non-wage component shrank by 6.3%, the largest decline since Q2 2016. In the third quarter, wage and salary costs rose by 0.3%, while the non-wage component fell by 5.8%.

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Friday, 5 March 2021

Interest in Houses in Zagreb Down 10%, Says Online Classified Site

ZAGREB, 5 March, 2021 - Over the past 12 months interest in buying a house in Zagreb dropped by 10% while at the same time interest in house purchase in Gorski Kotar, Lika and Istria grew significantly, shows an analysis by the Njuškalo online classified site.

Even though there have been no major changes in asking prices for real estate in Zagreb over the past 12 months, trends related to demand point to changes in customers' interest, which is probably due to a series of earthquakes that hit central Croatia in 2020.

Whereas last year clients increasingly searched for houses in Zagreb, rather than flats, over the past 12 months the interest in buying a house in Zagreb dropped by 10%.

In the entire country the interest in house and flat purchases grew less than one percent on the year but some regions have become much more attractive.

In the central mountainous Primorje-Gorski Kotar County, the interest in buying a house rose by 26.75% in the last 12 months, while in Istria it went up by 25%. Ads for properties in Lika-Senj County, too, saw an increase in views of 22.4%.

The average asking price for houses in Primorje-Gorski Kotar County was €1,595 per square metre, in Istria County it was €1,799 and in Lika-Senj County €1,160.

Potential buyers also increasingly searched for houses in Zadar County, as well as in the region of Međimurje, with interest in buying real estate there going up by 11%.

Interest in flats in Zagreb up 5.6%

From February 2020 to February 2021 interest in buying a flat in Zagreb grew by 5.6%, with the average asking price exceeding €2,150 in February 2021.

Among the cities where asking prices have continued growing are Osijek, Zadar and Pula, with Rijeka seeing the highest increase, of 6.4%, for the second consecutive month. Even though Split was previously in this group, it has been stagnating now in terms of the average asking price, Njuškalo says.

Rent in Zagreb down 9%, demand down 6%

Over the past 12 months, the rent on flats in Zagreb dropped by 9% and demand in the first two months of this year dropped 6% compared to the same period of 2020.

The average rent in Zagreb was €539, with most flats for rent having an area of 40-70 square metres, and the only flats to see an increase in the cost of rent on the year were those with an area of 20 square metres. The cost of rent for such flats went up by 3.2% to an average €231 per month.

The cost of rent dropped the most in the downtown area of Zagreb, by 11%, however, the average cost of rent still exceeds €700 a month, the online site says.

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