At the presentation of the Privredni vjesnik survey, participating companies expect a 23 percent lower net profit in the coming year. The survey included 556 Croatian companies that generate 11.5 percent of the total revenue of the economy and employ nearly 12 percent of the workforce.
Members of the management boards of these companies rated the past year as poor with a score of 2.24, and almost 52 percent of respondents expect a significant impact from the crisis in the coming year. The representatives of the construction sector lead in pessimism, with 82 percent expecting tougher business conditions. Žarko Primorac, who spoke at the round table held after the presentation of the survey results, claims that Croatia is still not close to exiting the crisis that has hit it hard. – If we had taken the necessary measures two years ago, there would have been fewer bankrupt companies and fewer lost jobs – explained Primorac. According to his view, the biggest problem of the domestic economy today is illiquidity, as there are 30 percent more insolvent companies in the country this year than last year. The illiquidity of craftsmen has also increased, as well as the number of bad loans. Illiquidity, according to Primorac, started from the state and state structures.
Banks also pose a problem, as they should direct far more money towards lending to companies. It is also necessary to assist builders who could, if current trends continue, become the next ‘hot potato’. Besides the current crisis, it is important how prepared our companies are for the imminent entry into the European Union, where they will face much stronger competition than before. Macroeconomist Gordan Družić commented on the situation in the balance of payments, specifically the deficit in the balance of payments. He claims that this represents a far greater problem for the state than planning and filling the budget. – From a macroeconomic standpoint, this over-indebtedness system is unsustainable, and the main task of economic policy is not to fill the budget but to provide companies with conditions for normal operation – said Družić, who expects a GDP decline of 3.5 percent and an increase in unemployment in 2010. Domagoj Milošević from the Pastor group also participated in the round table. According to him, the domestic economy is introverted, but due to the crisis, there has been a shift towards considering foreign markets. In the coming year, the economy will struggle with illiquidity, lack of capital, and its purchase price. (Ante Livajić)
