Croatian Employment Rate Never Higher

Lauren Simmonds

croatian employment

July the 7th, 2024 – The Croatian employment rate has never been higher than it currently is, but is it all quite as encouraging as it looks at first glance?

As Poslovni Dnevnik writes, on Friday at around noon, the Croatian Employment Service (CES) showcased a surprising figure – only 85,803 people in the country are registered as being unemployed.

Just a decade or more ago (which in this case isn’t necessarily be considered a long time ago) the situation was completely different. Exactly ten years ago, there were 330,000 unemployed people in Croatia. Back at the end of 2012, there were more than 370,000 unemployed people living in Croatia at one point. Unemployment has been growing ever since the global financial crisis which dominated 2008 and 2009. It changed significantly with Croatia’s entry into the European Union and the departure of many people to other EU countries.

croatian employment is always the highest in july

The CES explained the way their data for May looked and of course, this was down to needs of the summer tourist season. “In May, most exits from the unemployment register are due to employment in the sector of providing accommodation, preparing and serving food, and the like,” they said.

Economist and scientific advisor of the Zagreb Institute of Economics, Ph.D. Danijel Nestić, noted for N1 that May isn’t even the month with the usual lowest unemployment rate historically.

“There are some seasonal fluctuations, and the highest Croatian employment level is usually in July. That means that it’s possible that it will continue to fall. These are very, very low numbers and common sense says that this is a good thing. However, economists can see a bit of a problem with it, claiming that it shows that that the domestic economy is overheated, and that it’s actually working beyond its capacities,” he explained.

the risks of a cool down…

According to these interpretations, added Nestić, the consequence of record low unemployment may be the risk of inflation growth and that this obvious “overheating” is followed by a “cooling” down phase.

“This probably indicates that the Croatian economy is growing very rapidly. It also highlights a serious problem with the lack of manpower. There’s always a certain number of unemployed people, but we clearly have a structural problem. In certain sectors and for certain occupations, the country is very clearly short of manpower,” he said.

There are constant attempts to deal with this chronic deficit by importing workers from third countries, but it doesn’t solve the problem completely.

“It’s difficult to replace workers in sectors where language skills or some other more specific skills are required. Croatia’s current immigration situation does solve the problems we have in construction and hospitality, but not so much in other sectors.”

All in all, he says, the current situation is good because most of those who want to find a job succeed in doing so, which does not solve the problem of shortages in certain sectors.

the croatian economy is expanding

“All this shows that some sectors, as well as the entire domestic economy, are expanding,” he noted.

Among these 80,000 currently unemployed people are some, Nestić claimed, who are in transition after school to work or from one job to another. However, there’s also a certain number of people whose professional skills are not really in demand on the labour market, and they themselves are not ready to change their desired profession.

“There will always be a certain number of unemployed people and it’s always good to have a small pool of unemployed people if there’s a cyclical need for workers in some sectors,” he explained.

more retirees, less young people…

In the end, he added, low unemployment levels such as these can also be explained by the fact that Croatia is a society with a very serious demographic problem.

“Croatia is an old society. People are retiring, there are plenty of older groups, and there are fewer and fewer younger ones. Year after year, the number of those entering the labour market from the school system is decreasing. The need to import labour will probably become far more permanent, if intensive economic growth is to be maintained,” concluded Nestić.


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