HUP: GDP is Growing Thanks to Others, Not Because Policy Has Created Conditions

The Chief Executive of the Croatian Employers’ Association (HUP), Davor Majetić, assessed on Wednesday that the news of continued GDP growth in the second quarter is positive for the Croatian economy, but despite this, it is not a sign that the conditions for long-term and stable growth have been created.

– The news of continued GDP growth is positive for the Croatian economy. However, despite the fact that we are growing more than expected, this is not a sign that we have created the conditions for long-term and stable growth that will result in a significantly better standard of living for Croatian citizens, said Majetić.

– The rates at which we are growing are still too low for us to begin catching up with other EU member states, and it is a painful fact that we remain one of the weakest economies, he said.

Majetić notes that Croatian GDP is primarily growing thanks to others, not because our policy has ensured the conditions for a strong economic recovery of the country.

– We are fortunate that a whole range of external circumstances are working in our favor, and the private sector, which has made a number of adjustments during the crisis, is successfully utilizing them. However, the possibilities for such growth are limited and, in addition, we remain exposed to risks with any change in the current favorable external conditions, he states.

Majetić believes that it is “dangerous and irresponsible to use this situation as an excuse to continue avoiding the implementation of reforms.”

– HUP has clearly communicated to the parties ahead of the elections that changes in all areas where we lag behind others and where we are not efficient and competitive enough remain a priority, Majetić stated.

The State Bureau of Statistics (DZS) announced on Wednesday its first estimate indicating that the gross domestic product (GDP) in the last quarter grew by 2.8 percent compared to the same period last year.

This is a better figure than expected. Eight macroeconomists who participated in a Hina survey estimated on average that the economy grew by 2.3 percent year-on-year. Their growth estimates ranged from 2.1 to 2.5 percent.

DZS reported that the largest contribution to the increase was achieved through the growth of exports of goods and services, by 4.1 percent during that period. The contribution of domestic demand was positive. Among the components of domestic demand, the strongest positive impact on economic activity was caused by the increase in household final consumption expenditures – by 3 percent.

Other key components of GDP also increased, with government consumption rising by 2.6 percent, while gross investments in fixed capital jumped by 6.3 percent.