Economic policy to focus on development

The COVID-19 pandemic has not deterred the government from pursuing the economic policies that will help Croatia to accomplish its strategic goals, Prime Minister Andrej Plenković said in Opatija on Wednesday, announcing the acceleration of the economic recovery.

Addressing an annual gathering of the Croatian Economists' Society, Plenković said that the focus would be shifted from crisis management to development, and that he expected 2022 and 2023 to be the years of the economic recovery.

The focus of the economic policies will be on boosting productivity, competitiveness, innovation and job creation, the prime minister said.

The National Recovery and Resilience Plan is a development and generational opportunity, he said, recalling that over €25 billion from the European funds will be made available to Croatia.

The COVID-19 pandemic has suspended the upward economic trends for some time, however, the government has not backed down from its strategic goals, such as admission to the Schengen area and the euro area, the construction of Pelješac Bridge and the procurement of fighter jets for the Croatian Air Force.

Average monthly wage to rise to €1,000 in 2023

Our target is to ensure that in 2023 the average take-home pay is €1,000. We will continue creating prerequisites for the growth of all wages, and until 2024, the minimum wage should reach at least €565, Plenković said. The minimum wage was recently raised to €500.

Until the end of this decade, Croatia's GDP per capita should reach 75% of the EU average, he added.

All these steps being taken at the national level are adjusted to global trends and European priorities, so that the national and economic interests of the country can be achieved and living standards can be improved, the prime minister said.

He went on to say that the pace of the economic recovery would also depend on the success in containing the coronavirus epidemic and on good economic policies.

Apart from the challenges stemming from the COVID-19 pandemic and the health crisis, climate change, growing demand for natural resources, as well as unfavourable demographic trends, Croatia also had to cope with the consequences of the 2020 devastating quakes, he recalled.

The responsible economic policies are the best answer to those challenges, and the main economic policy goals are attaining sustainable economic growth, full employment and avoidance of social differentiation.

The budget for 2022 envisages additional outlays for social welfare allowances, parental leave allowances, for mergers of local government units and for the purchase of fighter jets.

He also pointed out the 2030 National Development Strategy, which should contribute to the green transition, digital transformation and demographic revitalisation.

In times of crisis, Croatia has proved its ability to maintain political stability, and has prevented the degradation of society and the economy. Macroeconomic indicators hint at the economic recovery, Croatia is financially stable and we can look forward to the years ahead, Plenković said.

For instance, this year's growth rate is set to reach 9%, which is higher than the growth in 2019, he noted.

The PM pointed out the contribution of the tourist industry to the GDP growth, and recalled good preparatory measures that enabled an excellent tourist season in the summer of 2020.

Recalling the five rounds of the tax reform, he said that the tax reduction made over HRK 10 billion available to citizens and the enterprise sector.

At the end of October, the number of Croatians in work increased by 42,000 compared with the same period in 2020, with the unemployment rate falling to 7.2%, he added.

Text: Hina

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