Current geopolitical tensions strongly affect the security of supply chains, the volatility of industrial goods prices, energy, and the overall development of the economy. The increase in interest rates and the slowdown in the growth of international trade are hindering economic growth, so it is not surprising that the German economy, the engine of the European economy, is actually in recession. The decline in German industrial production is accompanied by a drop in forward-looking indicators, which, of course, concerns us all.
European and Croatian demographic trends are also worrying, and by 2030, it is expected that a quarter of employees in some European countries, including our own, will be foreigners. The three main supporting pillars of the EU architecture – the security pillar, the energy pillar, and the prospects for exports to global markets – are shaken, which is why forecasts for long-term growth of the European economy are becoming increasingly bleak. Additionally, negative risks for economic growth may arise from the deepening energy crisis, further geopolitical instability, and a deepening recession in larger European economies. We are therefore aware of the risks of global slowdown, worsening business climate indices, and macroeconomic outlooks, as well as the likely decline in industrial production and commodity exports.
A solid basis for optimism
Although the global picture is bleak, the prospects for the Croatian economy are much brighter. One of the most dynamic economies in the European Union this year is indeed Croatia. Good fiscal and monetary policy, as well as international positioning, Croatia’s entry into the eurozone and Schengen area have strengthened positive trends, spurred strong production growth, increased employment, and overall well-being.
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The improvement in credit rating and economic attractiveness of Croatia, along with the expansion of available structural funds and resources from the Recovery and Resilience Plan, has further strengthened the growth of the Croatian economy. The Croatian ICT sector, of which OIV is a part, creates high added value, whose share in the overall economy is rapidly increasing. Croatian companies have solid balance sheets, are not overly indebted, and are therefore more resilient to the global economic slowdown. Croatian banks are also more resilient to a potential crisis due to better capitalization and excess liquidity. Croatia generates a budget surplus and ranks fifth in the largest decline in public debt among EU member states. Trends in Croatian public finances are excellent, and all prerequisites for further reforms and new tax reliefs have been created. The present of Croatia – the platform from which we plan business in 2024 – is certainly a solid basis for optimism regardless of global trends.
