Unsettled Obligations of Croatian Entrepreneurs Amount to 34.2 Billion Kuna

Unsettled obligations of legal entities and craftsmen in Croatia amounted to a record 34.2 billion kuna at the end of October, which is 701.4 million kuna more than in the previous month, and 9.4 billion kuna or 38.2 percent more than in the same period last year, according to data from the Financial Agency.

At the same time, 32,265 insolvent legal entities with 46,458 employees at the end of October had unsettled payment orders totaling 28.1 billion kuna, while unpaid due obligations of 41,338 individuals or craftsmen with 25,744 employees amounted to 6.1 billion kuna. Data from Fina, which is published in the “Economic Trends” of the Croatian Chamber of Commerce, shows that the continuation of the trend of rising insolvency in October was at a somewhat slower pace than in September. For legal entities, an increase in the value of unsettled due orders of 564.5 million kuna was recorded in October compared to the previous month, while for craftsmen, it was 136.9 million kuna. The amount of unsettled orders of legal entities at the end of this October, at a record 28.1 billion kuna, was 8.3 billion kuna or 41.9 percent higher than in the same month last year.

Unsettled obligations were registered with 32,265 legal entities, which is 760 more than in the previous month, and on an annual basis, compared to last October, the number of insolvent legal entities is higher by 27.2 percent or 6.9 thousand. The number of employees in insolvent legal entities in October of 46,458 was 1.1 percent higher than in the previous month, but 7 percent or 3.5 thousand lower than in the same month last year. For individuals or craftsmen, the increase in the amount of due unsettled obligations on an annual basis was 23.5 percent or increased by 1.16 billion kuna, totaling 6.09 billion kuna. At the end of October, 41,338 insolvent craftsmen were recorded, which is 1.9 percent more compared to the previous month, and 15.4 percent or 5.5 thousand more on an annual basis. Insolvent craftsmen employed 25,744 workers, which is 1.2 percent more compared to the previous month, and on an annual basis, their number is higher by 5.3 percent or 1.3 thousand.

Analysts from the Center for Macroeconomic Analysis of the Croatian Chamber of Commerce state that in the last year, by maturity days, the number of insolvent legal entities related to terms over 360 days grew the fastest, by 32.4 percent. In this context, the number of companies increased by 5,714. Moreover, the fastest growth of unsettled obligations was achieved precisely in this term (52.2 percent), so these obligations now account for 82.3 percent of total unsettled obligations. Of the total amount of unsettled payment orders for legal entities, 47.3 percent or 13.3 billion kuna are obligations based on taxes (11.6 billion kuna) and contributions (1.6 billion kuna). On an annual basis, unpaid obligations based on taxes and contributions increased by 36.3 percent. In total unsettled obligations, three activities continue to dominate with a share of 68.1 percent – trade with 33.4 percent, construction 18.7 percent, and manufacturing industry with 16 percent. (H)