Plenković: The Government is Preparing a Package of Measures to Combat Inflation

Prime Minister Andrej Plenković announced that the Government is working on a package of measures to combat inflation and energy prices, emphasizing that the VAT rate on solar panels will be reduced to zero percent, and assistance will be provided to companies owned by local governments and entrepreneurs who are facing issues with gas supply contracts.

At the beginning of the Government session, Plenković also commented on gas supply for the winter season, stating that the dynamics of filling the capacity of the Underground Storage Facility Okoli is accelerating, and as of today, it is 68 percent full, with plans to reach 90 percent by the beginning of October, in accordance with the plan.

He also announced that the Government plans to soon reduce VAT on solar energy.

– We believe that we need to look at how to make a transition in the long term and ensure a stable supply of electricity, and all those who wish to invest in solar panels will have the opportunity to do so without VAT, meaning the VAT rate on solar will be zero percent –  stated Plenković.

According to him, the ministries of finance, economy and sustainable development, labor and social welfare, as well as Deputy Prime Minister Oleg Butković, are working on a package of measures aimed at combating inflation and energy prices.

 – We are very much aware of the difficulties that certain companies owned by regional and local governments and entrepreneurs are facing due to rising energy prices. The situation with contracts is different; this problem is at a somewhat point-specific level, meaning it is not horizontal, but the Government has ideas on how to solve this problem in a long-term and sustainable manner, and this will be presented in a few weeks when we agree with the stakeholders who need to contribute to this process, primarily referring to energy companies – he said.

Regarding the latest data on annual inflation in July at a record 12.3 percent, Plenković stated that next week the Government will hold three sessions – a telephone session on Monday dedicated to the prices of oil derivatives, a session on Wednesday focused on a large package of over 60 laws related to Croatia’s accession to the euro area, and a regular session on Thursday. 

Excellent Tourist Season

Reflecting on the current tourist season, he assessed it as excellent. He provided data that currently, there are one million and 60 thousand tourists in Croatia, with the largest groups being Germans, Italians, Slovenians, Poles, and Austrians, with the highest numbers in Istria, Primorje-Gorski Kotar, and Split-Dalmatia counties.

Since the beginning of the year, there have been 13.1 million arrivals and 73.4 million overnight stays, which is a 45 percent increase in arrivals and a 32 percent increase in overnight stays compared to last year. Compared to the record year of 2019, Croatia is currently at 90 percent of arrivals and 96 percent of overnight stays.

– What is particularly good are the forecasts for autumn, the season is extending, revenues are increasing, which is very good. In the first quarter, revenues are up two percent compared to the same period in the record year of 2019 –  emphasized Plenković, reminding that the Croatian National Bank estimates that tourism revenues this year will be 800 million euros higher than in 2019, totaling 11.3 billion euros.