February the 13th, 2024 – The Croatian Employers’ Association (HUP) says that the Croatian economy could grow by 2.5% this year.
As Poslovni Dnevnik/Ana Blaskovic writes, the Croatian Employers’ Association’s chief economist Hrvoje Stojić expects the Croatian economy to grow. In particular, GDP growth of 3.3 percent in the last quarter of 2023 is expected. These expectations are on the wings of the strong acceleration of real turnover in retail trade in the first quarter, which reached 7.6 percent on an annual level. In addition, there’s also the recovery of the industry after the fall in the third quarter of last year, the jump in investments and the sharper decline in imports compared to exports.
At the level of the whole year, the growth of the Croatian economy should reach 2.6 percent, “according to which Croatia remains at the very top at the level of the EU”, he assessed, attributing these expectations to a very robust labour market and “a kind of consumer boom which will likely continue for some time.
For the second half of the year, HUP is counting on a certain recovery of goods exports, thanks to which a line could be drawn under similar GDP growth of 2.5 percent. “Higher energy prices, along with the less than competitive tax treatment of middle and higher salaries, all adversely affect the competitiveness of Croatian companies and private investments”, they assessed, noting that they see this as “a challenge for faster growth in the medium term”.
“Competitiveness should be built through the strengthening of human capacities through harmonising the needs of the labour market and education with a far more targeted immigration policy”, they noted, adding that the new Law on Foreigners brings some “welcome flexibility” through the extension of work permits, while more digitisation will finally speed up the infamously long and complex administrative procedures. With all that being said, the Republic of Croatia also still needs a stronger platform for attracting highly qualified workers from third markets.