Unions and Employers React to Good GDP Numbers

Total Croatia News

Some reactions to the recent better than expected economic results. 

Trade unions claim that the GDP growth of 1.2 percent in the second quarter is higher than expected but lower than required, and that for the higher growth structural reforms and different economic policies are needed, reports Slobodna Dalmacija on August 28, 2015.

The president of the Croatian Association of Trade Unions Ozren Matijašević said that the government has finally stopped the erosion of the economy. “If we have criticized the government for 12 consecutive quarters of falling GDP, it would not be fair to say that this growth is only the result of the influence of external factors. Therefore, we are ready to give conditional recognition to the government for the fact that it has managed to stop the erosion of the economy.”

He believes it is very good news that the economic growth was mostly influenced by household consumption, which has in recent years dropped by more than 20 percent. However, he warned that this is just the beginning because further growth depends on “decisive and prompt” reforms of tax policy and economy, as well as on interventions in the banking sector.

“GDP growth was higher than expected, but lower than required”, said president of the Independent Croatian Unions Krešimir Sever. “Given the high level of debt, Croatia needs GDP growth of at least 3 percent just to service its debts. The positive growth is better than the negative one, but growth below 3 percent only deepens the plight of the Croatian economy”, said Sever.

The Croatian Employers’ Association estimates that the GDP growth is largely a result of the restructuring of the private sector, and that only a growth rate of 3 percent would show that the country has begun to solve real problems and to increase the standard of living.

“This positive development is largely the result of the restructuring of the private sector which in times of crisis had to adapt to difficult business conditions and focus on exports. The state administration is still bloated and generates high costs and debts. Therefore, only with the rate of 3 percent of GDP growth could we say that we have started to restructure as a country, to solve problems and to increase the standard of living”, said general manager of the Association Davor Majetić.

“It is necessary to activate all available resources which can in a relatively short time achieve positive changes, starting with unused state property and the privatization of insolvent state-owned companies to attract private investors. Also, bureaucratic procedures should be reduced, while the transparency should be increased”, said Majetić.

Croatian Bureau of Statistics said on Friday that the gross domestic product (GDP) in the second quarter rose by 1.2 percent year on year. That was much higher than expected. A few days ago, eight macroeconomists who participated in the survey by HINA estimated on average that the economy grew by 0.7 percent compared to the same period last year.


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