se times
17/11/2010
Despite good tourism numbers, unemployment is high and productivity is in a slump. Analysts don't foresee a quick fix.
By Natasa Radic for Southeast European Times in Zagreb -17/10/10
Despite good tourism numbers, unemployment is high and productivity is in a slump. Analysts don't foresee a quick fix.
By Natasa Radic for Southeast European Times in Zagreb -17/10/10
Croatians will need to dip into their savings over the next five years if they want to maintain the lifestyle they enjoyed prior to the global financial crisis, the government says in a recently released report.
The document, prepared by the finance ministry, is an annual outline of fiscal and monetary policy affecting the Croatian economy. It covers economic trends until 2013, but with lasting impacts until 2015.
"This is the first time the government calls things by their real name, but it is not enough. Not long ago, those who mentioned these prognoses were considered 'catastrophists'", Economics Professor Luka Brkic tells SETimes.
The recovery will depend heavily on the EU economy and its impact on Croatia, the report said. Some analysts sharply disagree with that conclusion, saying that it is shifting the blame for domestic problems that require painful reform.
It is "wrong to rely on the EU and think that the recovery of the Croatian economy will depend on the EU", writes Institute for Public Finance head Katerina Ott on her website. "We should face the fact that Croatia has an uncompetitive economy and a huge public sector."
Croatia was hit hard by the global economic crisis, with the economy shrinking to 5.5% in 2009. Despite a good 2010 yield from tourism, productivity has not yet rebounded. The unemployment rate is 16.4%.
A report by Roubini Global Economics found that despite improved external demand this year, investments continue to decline sharply and consumer spending is weak. However, it sees room for hope.
The document, prepared by the finance ministry, is an annual outline of fiscal and monetary policy affecting the Croatian economy. It covers economic trends until 2013, but with lasting impacts until 2015.
"This is the first time the government calls things by their real name, but it is not enough. Not long ago, those who mentioned these prognoses were considered 'catastrophists'", Economics Professor Luka Brkic tells SETimes.
The recovery will depend heavily on the EU economy and its impact on Croatia, the report said. Some analysts sharply disagree with that conclusion, saying that it is shifting the blame for domestic problems that require painful reform.
It is "wrong to rely on the EU and think that the recovery of the Croatian economy will depend on the EU", writes Institute for Public Finance head Katerina Ott on her website. "We should face the fact that Croatia has an uncompetitive economy and a huge public sector."
Croatia was hit hard by the global economic crisis, with the economy shrinking to 5.5% in 2009. Despite a good 2010 yield from tourism, productivity has not yet rebounded. The unemployment rate is 16.4%.
A report by Roubini Global Economics found that despite improved external demand this year, investments continue to decline sharply and consumer spending is weak. However, it sees room for hope.
"Croatia's economy should return to a positive growth rate in 2011 driven by an investment rebound, the approaching EU entry and a moderate improvement in consumer spending," the Roubini report says.
Meanwhile, ordinary citizens are feeling the pinch.
"I feel like I cannot afford things easily anymore. Some things that we used to buy before, without even noticing, are more difficult to purchase today -- books, CDs, textiles," says Zeljko Matic, a Zagreb salesman. He may sell his second car to boost the family budget.
"Filling a gas tank is something you must think over. It was not like this before," Matic sighs.
This content was commissioned for SETimes.com.
Meanwhile, ordinary citizens are feeling the pinch.
"I feel like I cannot afford things easily anymore. Some things that we used to buy before, without even noticing, are more difficult to purchase today -- books, CDs, textiles," says Zeljko Matic, a Zagreb salesman. He may sell his second car to boost the family budget.
"Filling a gas tank is something you must think over. It was not like this before," Matic sighs.
This content was commissioned for SETimes.com.
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