The Deputy Managing Director of the International Monetary Fund, Tao Zhang (Grgo Jelavic/PIXSELL) The Deputy Managing Director of the International Monetary Fund, Tao Zhang (Grgo Jelavic/PIXSELL)

Emigration and an ageing population are the main reasons for the current labor shortage, not only in Croatia, but in central, eastern, and southeastern Europe as well and the trend could have a profound effect on the future of the region. The Deputy Managing Director of the International Monetary Fund, Tao Zhang, unveiled the IMF's latest research, which includes some very worrisome data. The population of the region as a whole, excluding Turkey, is going to decline by 12 percent by 2050, while the working population will drop by 25%, Zhang said.

The declining population is the most important challenge the country faces, said Prime Minister Andrej Plenković, but added that his government's population boosting measures were working, citing data that there were 400 more births in Croatia last year than the year before.

“Demographics are the key issue for the survival not only of Croats but other European nations as well. That is why we insisted that this demographics challenge was included in the EU's strategic program for the next five years,” Plenković said.

Finance Minister Zdravko Marić plans to unveil a set of measures later this month that are aimed at raising salaries and stopping the flow of workers out of the country.

“We are going to try and lift the tax burned wherever we can. Unfortunately, there isn't too much room for that like there was in the past two years. However, it is our responsibility to find a way in this limited space that we do have to give employers some additional stimulus,” Marić said.

Although raising salaries is an important factor for retaining workers, central bank governor, Boris Vujčić says, it is not the only one.

“Foreign workers are one thing, that's definitely something that is necessary in the short term. The second is to try and get the people who are here but are not working, and there are quite a few of them, back into the workforce,” Vujčić said.

There are around 150 people, including ministers and central bank governors from the region, participating at the conference.