Contrary to the forecasts of many critics, this year’s tourist season has not failed. While the data from eVisitor indicating a one percent increase in arrivals and overnight stays may be taken with caution, the data from the Ministry of Finance regarding fiscalization should be reliable. They state that in July, the number of fiscalized invoices was 1.2 percent higher than in July of last year, and the amount was 6.1 percent higher. In the first half of August, 2.5 percent more invoices were issued, and the amount was 7.7 percent higher.
This is yet another example that will further amplify the frustration of many who feel that the economy is not heading in the right direction, while official data contradicts this. It is likely that GDP in 2025 will show a growth of around three percent. Prime Minister Plenković will, with pleasure, selectively present additional data to confront critics.
Explosions and Implosions
What is the ‘catch’? One possible answer is that economic phenomena have changed, so to speak. At the end of socialism and the beginning of the transition to capitalism, imbalances quickly and visibly surfaced and exploded. Today, changes occur beneath the surface. Like tectonic plates that push against each other for a long time, only to cause a devastating earthquake after a while. Or perhaps a better parallel is that while economic imbalances once exploded, today we are witnessing a series of separate, externally harder to prove, implosions.
An example could be inflation. We older ones remember monthly inflations of thirty percent, so compared to that, today’s official annual inflation of four percent seems laughable. Moreover, when the government assures that wage growth negates the effect of rising prices, a worm of doubt is born regarding one’s own perception of rising costs. However, the former explosion of hyperinflation was extinguished by urgently converting earned wages into German marks with street dealers. Today, there is no currency to convert euros into to protect against inflation during the month. Once, the crisis was reflected in empty shelves. There was money, but no goods. Today, shelves are full, but many cannot overcome inflation with money.
Once, wages were delayed, suppliers were not paid, and bankruptcies opened in waves. Today, delays (for now) are relatively rare. In fear of losing workers to competitors, employers are trying to raise wages just as the state, as an employer – a ‘drunken billionaire’ – raises wages for its own. The result is not visible as an explosion, but it is an example of implosion: there is no profit left for research, development, and investments. This will only be felt in a few years with job losses. Once, losses escalated within a year. Today, the danger is creeping up. Only the Leader’s list of the largest companies shows that nearly half of the companies on the list last year, despite inflation and GDP growth, recorded a decline in revenue.
