Analyst: Contraction of Economy Depends on Duration of Epidemic

Total Croatia News

ZAGREB, April 1, 2020 – If the epidemic is over relatively soon, the impact on the national economy will be weaker, however if all this lasts longer, Croatia’s Gross Domestic Product could contract by 10%, says economist Danijel Nestić.

Nestić, a senior research fellow at the Institute of Economics in Zagreb, told the RTL commercial broadcaster on Tuesday evening that one should hope that the government measures for mitigating the impact of the crisis could temporarily halt a rise in the number of the jobless.

Businesses have stopped working, people are spending less and less, one in three workers is paid a minimum wage, 12,000 people were fired in the last 14 days, due to the outbreak of the coronavirus disease.

The economist said that that one should hope that the number of the jobless would not rise on an exponential curve in the remainder of the year.

“The economy is stronger now than it was in 2008, the government measures are here, funds from the European Union are available, and I do not believe that the number of the unemployed would again reach record highs of 400,000 which was in the previous crisis,” Nestić said.

He admitted that the decline in BDP was inevitable. The contraction of GDP will depend on the duration of the epidemic risk, he explained.

This crisis has one good thing, it is a crisis brought from abroad and the cause is not in the economy itself, the expert said adding that in the event of that the epidemic lasts rather long, the country’s GDP could fall by 10%.

More economy news can be found in the Business section.


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