High Unemployment Comes from the Private Sector

In Croatia, in December of last year, according to data published today by the Croatian Bureau of Statistics, the unemployment rate jumped from 20.4 to 21.1 percent, the highest level since March 2003.

This is in line with the expectations of five macroeconomists who participated in a survey by Hina. Their estimates ranged from 21 to 21.2 percent. The unemployment rate of 21 percent was last recorded in March 2003.
– The average unemployment rate for the entire last year reached 19.1 percent, which is the highest level of registered unemployment since 2003, when it was 19.5 percent – says Zrinka Živković-Matijević, director of the Economic Research Directorate at Raiffeisenbank Austria.

She emphasizes that Croatia, which has a typical seasonality in the labor market, records an increase in employment during the tourist pre-season and season, and a decline after the season, is additionally burdened by prolonged recession.

– The recession has lasted for four years, there is no economic recovery, the private sector has long adapted to the circumstances that have arisen, and such high unemployment mainly comes from the private sector – states Živković-Matijević. She notes that, in addition to the recession, the domestic labor market is also plagued by structural problems.

– When comparing the unemployment rates of Croatia and other peripheral countries in Europe, more or less all have similar characteristics. All these countries suffer from structural problems, namely the mismatch between supply and demand in the labor market, which extends to the education system that does not meet the needs of that market – emphasizes Zrinka Živković-Matijević, who does not expect a recovery in the labor market anytime soon.

– The average unemployment rate this year could remain at last year’s level provided that negative trends in the economy can be halted – concludes Živković-Matijević. The Croatian Employment Service recently reported that at the end of December, about 358,200 unemployed persons were registered, which is an increase of 3.2 percent, or 11,160 persons more than in November, and an increase of 13.6 percent, or 42,700 persons more than in December of the previous year.