January the 2nd, 2024 – Croatian salaries have risen quite considerably, especially since Eurozone accession, but will that upward trajectory continue throughout 2024? Economic analyst Luka Brkić weighs in.
As Poslovni Dnevnik writes, Croatian economic analyst and professor at Libertas University Luka Brkić was a recent guest on N1 televizija/television where he commented on the most important economic moves in 2023.
Brkić believes that any tax reduction is a overall good thing, but that local self-government units, especially the one here in Zagreb, ultimately keeps on throwing proverbial spanners in the works. “As for increases in Croatian salaries themselves, of course they’ll be different. In the City of Zagreb, these changes will be negligible, but elsewhere, you will see a little more landing in people’s bank accounts each month,” he said.
“In my opinion, these moves can’t actually be referred to as reforms. The entire instrument of tax policy hasn’t been touched, VAT hasn’t been touched, we don’t have property tax, we’ve stuck with the same old primitive tax system,” he added.
trade unions have a lot of negotiating power
“I hope that there will be some developments to speak of, but I don’t expect sensational results because these are sensitive things as you’re touching someone’s status and what they’ve acquired. I hope there will be more order to come and I’m sure that there will be an increase in Croatian wages. Trade unions have a lot of negotiating power, and we mustn’t forget that this is an election year,” explained Brkić.
“Estimates say that inflation will fall, but this issue is a bit more complex. Estimates made by all of the relevant institutions show that inflation will reach 3-4 percent, meaning it isn’t quite yet at the magic 2 percent goal as pursued by the European Central Bank and the American FED. What characterises inflation here in Croatia is the agricultural industry, that is, the prices of food and beverages, because we’re largely dependent on export markets, and that was the case even before joining the EU back in 2013,” he said.
Regarding the possible recession in Germany, Brkić said that it will be reflected right here in Croatia as well. “The German economy isn’t the sick man of Europe anymore, but it does have a number of problems. Croatia cannot be part of the so-called European family without any repercussions, we’re a small open economy. Due to a possible recession, we may end up having a few problems when it comes to industry, as well as in tourism,” he added.