Only one percent of entrepreneurs consider the business climate in Croatia to be positive

Only one percent of entrepreneurs consider the business climate in Croatia to be encouraging, while as many as 76 percent of respondents deem it discouraging, according to a survey on business obstacles conducted by the Croatian Chamber of Commerce.

At a conference held on Wednesday at the HGK premises, Svjetlana Momčilović, head of the Investment Attraction Department of the Croatian Chamber of Commerce, presented the results to the attendees, highlighting that 750 respondents identified legal uncertainty, the judiciary, tax obligations, and administrative inefficiency as the biggest obstacles, which include the number of necessary regulations, frequent changes to those regulations, and insufficient adjustment periods.

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Furthermore, 53 percent of respondents consider the business climate unchanged, 31 percent see it as worsened, while only 16 percent perceive some improvement. The largest number of participants in the survey comes from the City of Zagreb and the Primorje-Gorski Kotar County, which identified better communication with public administration as the most significant improvement compared to the previous year.

The president of HGK, Luka Burilović, believes that the situation is changing for the better, albeit too slowly, primarily due to the fact that urgently needed reforms have stalled due to the crisis in Agrokor. This crisis has demonstrated the public administration’s inability to implement multiple reforms simultaneously.

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State Secretary in the Ministry of Economy, Nataša Mikuš Žigman, on behalf of the Government, presented positive developments in 2017, noting that GDP recorded a growth of 2.8 percent, primarily thanks to exports and household consumption, public debt stands at 78 percent of GDP, and the number of employed has increased by 3.8 percent.

She added that the largest global rating agencies recognized this by raising Croatia’s credit rating, as well as the fact that a stable tax system has been created and more than 100 measures for administrative relief have been introduced. In March of this year, a new action plan was adopted, which in terms of relief is valued at over 600 million kuna. She also listed the Government’s priorities for the upcoming period, among which the most important are strengthening competitiveness, digitalizing the service market, and greater connectivity with the labor market.

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The business climate index was rated 0.3 percent worse than in the previous period, concluding that progress exists, but it is too slow compared to other countries. This was also discussed during the panel discussion, where Goran Grotić, CEO of Ludbreg’s ACG Lukaps, complained that they cannot find the necessary workforce in their county. The director of ALTPRO, Zvonimir Viduka, explained that his company primarily operates with the Asian market and that, based on their experience, export incentives should be increased.