He added that there will not be a sharp decline in activity, but there will also not be a drop in the inflation rate, which is not something happening for the first time.

The past year and this one looked good, and the Government and Brussels boast about it. Croatia will finish this year as a more positive country in the EU and we are among the top five in terms of growth rate. But that is not a reflection of something having improved in the economy, says Ljubo Jurčić, president of the Croatian Society of Economists and former minister of economy, who appeared on Croatian Radio’s program ‘Interview of the Week’.

‘For next year it is projected that Croatia will grow by one percent. It is also bad that we will have inflation of over ten percent, and in the EU the structure is a little different so inflation will be slightly lower than in Croatia’, Jurčić said for HRT.

He emphasizes that for next year it is difficult to predict how high inflation will be. ‘The current estimate is that next year inflation will be 6-7 percent, but that does not mean that prices will return to the price level from 2022 and then rise to the level of the beginning of 2022, but rather that in Croatia they will, on top of the increase of 13-14 percent , rise by another 6-7 percent’, he pointed out. ‘Statistics show that EU citizens have started spending less, and that means they feel a decline in living standards. We can expect a further decline in living standards, but all of that also depends on policy’, he pointed out.

He adds that policy decides through its measures. ‘How it will distribute the cost of the crisis, how it will allocate the burden of the crisis onto the backs of citizens, entrepreneurs, and the state, all of that will affect inflation’, says Jurčić. He adds that Croatia has small production which further complicates the situation.

Jurčić wonders why it is necessary to support producers that are bigger than Croatia itself. ‘By freezing prices the market is being cleared of Croatian producers and the market for foreign suppliers is increasing’, he said. Asked who in Croatia should be affected by the tax on extra profit, Jurčić said that it will probably be companies engaged in the oil business. ‘As for companies, the target here should be speculative profit‘, Jurčić said for HRT.

Asked whether it was a mistake to sell part of INA, he said that Parliament passed the Privatization Act. ‘My role was to carry out privatization according to the law’, he pointed out. He adds that the majority on the Management Board and Supervisory Board was the Croatian side. As he says, they agreed that it was necessary to reconstruct Rijeka, it was necessary to find a strategy for Sisak and that gas stations should be raised to a higher level. ‘INA did not need a strategic partner. It needed good Croatian management, he emphasized.

‘Stagnation at the economic level is the worst possible scenario’

About the so-called ‘technical recession’ and its meaning for Croatian citizens on the HRT program Studio 4 economists Damir Novotny and Ivan Miloloža.

‘Technical recession means a mild decline in economic activity. The estimate is that next year the German economy will decline by 0.2 percent, which is a mild slowdown, but with a high inflation rate of six percent next year, that leads us toward stagnation with inflation’, said Novotny. He added that there will not be a sharp decline in activity, but there will also not be a drop in the inflation rate, which is not something happening for the first time.

‘That may be the worst scenario. I would rather like to see a sharp decline in economic activity and then a recovery, as we had in 2020 when economic activity in Croatia rose to ten percent in 2021’, he said. He says that stagnation at the economic level is the worst possible scenario. That is, as he says, good for developed economies, but not for us. ‘Wages will grow more slowly than the rise in the cost of living’, he said for HRT.

Miloloža wondered why we dispute successes. ‘This Government, without any political orientation, has done great things’, he says. He adds that this Government came into a position where we entered Schengen and the eurozone and that, ‘no matter how much we resist it, that will be good for the citizens of Croatia’.

Source: poslovni.hr