Government spending has risen since 2009, citizen spending has slowed down, and employers continue to express their heightened anxiety about the emigration of Croatia’s domestic labour force. Despite issues, a good Croatian tourist season has seen the economy boosted in the third quarter.
As Ljubica Gataric/VL/Poslovni Dnevnik writes on the 28th of November, 2018, the Croatian economy grew by 2.8 percent in the third quarter of this year, which is better than the previous expectations of domestic economists, but slower than the economy grew during the same period over last three years. A good Croatian tourist season has of course done its job well, and along with tourism, this positive contribution to economic growth has also been boosted by the further export of goods.
While a good Croatian tourist season is the main thing ”holding up” these positive results, data following the first GDP estimate reveals that the domestic construction sector recovered more (by about seven percent in surplus), while the manufacturing industry’s impact on GDP was negative (minus two percent) since industrial production collapsed that bit more this year.
“Taking into account the possibilities and the framework we’re currently facing, particularly the labour market situation and the challenges we have in industrial production, GDP growth of 2.8 percent is a relatively good result, almost at the maximum limit,” commented employers around Croatian Employers’ Association (HUP), which claims that regardless of the good results in the third quarter, they feel a slight slowdown in growth and a general sense of anxiety and nervousness among employers owing to problems with finding staff and the continuous fall in overall production.
HUP has also used this opportunity to become louder and louder still in its call on the Croatian Government to further ease the economy so that companies can raise employee salaries and thus prevent further migration of the country’s young and highly educated people in an ongoing and extremely concerning demographic crisis. Croatia entered winter with 147,000 unemployed people registered on the labour market, as well as 15,000 job vacancies.
In addition to the fact that movements being made in the Croatian economy aren’t in support of the current global trends, especially in terms of the dynamics of growth in the European Union, analysts from the Croatian Chamber of Commerce (HGK) have noted that relative to the first half of this year, slight changes in growth trends have indeed occurred in some categories of particular demand.
Personal consumption growth has slowed down as the category which has the highest share in the structure of total demand, while when it comes to government spending, investment in fixed capital and especially the export of goods and services, growth has been accelerating.
Looking at the figures, domestic demand during the first six months of 2018 had three and a half times greater impact on the growth of gross domestic product than in foreign countries. RBA analysts note that government consumption at a 3.9 percent rate rose more this year than in the first quarter of 2009, and growth in gross fixed capital investment continued to grow quarterly, an increase of 3.7 percent in the third quarter, which may indicate the increased utilisation of funds from the European Union.
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Click here for the original article by Ljubica Gataric/VL on Poslovni Dnevnik