ZAGREB, August 29, 2018 – The Croatian Chamber of Commerce (HGK) and Croatian Employers’ Association (HUP) find the Q2 GDP growth of 2.9% to be good news, however, the business community warns that that growth rate is insufficient to stop the country from lagging behind the average level of development in new European Union member states and employers also point to the lack workers as the main factor limiting further growth.
The HGK told Hina on Wednesday that the Q2 growth of 2.9% was still 0.3 percentage points lower than that achieved in the same period last year.
The State Bureau of Statistics (DZS) on Wednesday released its first estimate according to which gross domestic product in Q2 increased by 2.9% compared to the same period last year. That is the 16th quarter in a row that GDP increased, and at an accelerated rate compared to Q1 when GDP went up 2.5% on the year.
“When the consumption component in the GDP growth is considered, it indicates that the greatest impact on the accelerated growth rate was made by exports of commodities and services, which had a completely opposite effect in the first quarter. Other categories of demand have recorded a mild slowing down in growth including personal consumption which has the greatest share in the structure of total demand,” HGK said.
The greatest positive contribution to GDP in Q2 was made by the increase in the export of commodities and services DZS figures showed. Exports increased by 5.6% in Q2 year-on-year. In Q1, exports fell by 0.5% on the year.
HUP General-Director Davor Majetić believes that a growth rate of 2.9% is good news, however, he warned of the shortage of workers which is the main cause limiting further growth.
“According to information we have from the markets, employers say that that growth would be higher if they had enough workers and if they were able to pay them more because there are commissions for businesses, they can have plenty to do. Employers are facing that challenge and are increasing salaries as much as they can, however, the wage increase occurring in some companies is still insufficient to attract workers. We consider that the reform process being prepared by the government is exceptionally important to make the most of this positive trend in the economy,” Majetić said.
