In First Half of 2020, Coronavirus “Took” 66000 Jobs in Croatia

Lauren Simmonds

Copyright Romulic and Stojcic
Zagreb, Croatia
Zagreb, Croatia

The ongoing coronavirus pandemic has delivered a heavy blow to the Croatian economy, which relies an enormous amount on tourism, and the virus has taken a concerning amount of jobs across the country.

As Poslovni Dnevnik/Jadranka Dozan writes on the 14th of August, 2020, according to the Croatian Employment Service’s records on the number of unemployed people recorded in the first two weeks of August, their number decreased by five hundred when compared to the end of July. Yesterday, there were 150,959 people registered as jobseekers, and last month ended with 151,433 registered unemployed persons. When compared to June, the number of registered unemployed increased by 782 persons in July, while compared to July last year, it increased by more than 37,000.

In parallel with the monthly increase in the number of unemployed people, however, employment measured by the number of insured persons at the Croatian Pension Insurance Institute also increased in July. When compared to the month before, there were 0.8 percent or 12.7 thousand more people, reaching a total of 1.55 million people. This was the third consecutive month of growth in the number of insured persons in Croatia, although the negative trend that began in April unfortunately continued in the year-on-year comparisons.

For months now, the real momentum of the negative consequences of the coronavirus pandemic on the Croatian labour market has been announced with apprehension, because, in addition to seasonal shock absorbers, most government subsidies will be fully expressed in the sense of needing to subsidise employee salaries. During July alone (for the payment of salaries for the month of June) these subsidies covered significantly fewer workers than they did back during the first wave; a total of 67,040 workers were paid, all of whom were working for a total of 16,200 employers, while a total of 577,000 workers were paid for the month of April.

Up to 300,000 unemployed people in Croatia as a result of the coronavirus pandemic?

How many jobs will prove vulnerable in a few months, under these conditions of considerable uncertainty about the development of the coronavirus crisis, can only be guessed through rough estimates. Drazen Orescanin, an entrepreneur who has recently been primarily exposed through his role of executive director of the Voice of Entrepreneurs (Glas Poduzetnika) Association, recently stated that with the end of the tourist season and the arrival of autumn and winter on its way, we can realistically expect “some 250 to 300 thousand unemployed people at the Croatian Employment Service”. Anything beyond that, according to the aforementioned association, “would mean a very big crisis indeed.”

In the analysis published over recent days, Hanfa estimated the consequences of the coronavirus crisis on the labour market at around 66,000 lost jobs across Croatia in the first half of the year. The number of unemployed people in the first six months was a little less, more specifically 19 thousand less, but the analysis states that in recent years, at that time of year, the number of unemployed decreased by an average of 48 thousand, so the effect should be attributed to this variable.

According to Hanfa’s analysts, the rise in unemployment will hit the younger population the hardest, as the higher share of permanent contracts is among them, and seasonal workers, especially those working in the provision of services and in the tourism sector.

“In terms of the share of the total aid for job preservation, the processing industry and the trade sector are significantly endangered, as they rely heavily on cross-border trade, which has decreased,” they emphasised. In most of the current economic forecasts, the unemployment rate in Croatia, after falling to seven percent last year, could rise to ten percent again this year. The speed and intensity of the return to lower single-digit rates will depend to a large extent on the availability of European economic recovery assistance programmes.

For more on coronavirus in Croatia, follow our dedicated section.


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