Concerns about the possibility of another recession were one of the top issues addressed by economists and financiers gathered at an annual conference in Opatija on Wednesday.
Croatia's economy is growing, but growth is expected to slow down in the next two years, which has many people worried about the future. Economic growth has been moderate, at best, but its pace appeared to be increasing until recently. The governor of Croatia's central bank, Boris Vujčić, said that although recession is a possibility, what we can say with more certainty is that the economy is expected to keep growing next year.
“Of course, we cannot rule out the possibility of a recession, but when you look at our past recessions, we were not very successful in predicting when they would happen. However, the current forecast is that the Eurozone will continue to grow at just under 1% next year and Croatia could grow around 2.5%,” Vujčić said.
Economist Ljubo Jurčić remains optimistic, but warns that Croatia's vulnerable because of stagnation, a consequence of the lack of industrial policy, the exchange rage, the country's pension system, and bad investment policy.
“We can see Croatia is stagnating by the fact that it took us until 2018 to get to the growth rate we had in 2008. Europe as a whole is around 10% above those levels and transition countries are around 30% above where they were in 2008,” Jurčić said.
Environment and Energy Minister Tomislav Ćorić disagreed. He said the government has taken on a series of measures, like the tax cuts, to bolster investment and strengthen the economy. He pointed to a growth in employment as evidence the policies were working, adding that the employment figure for July had not been as high in 28 years.
President Kolinda Grabar-Kitarović told the conference that the country had made significant economic progress during her mandate. The President set an ambitious target, economic growth of 5%, as what Croatia needed to achieve for Croatians to feel like their lives are getting better.
"We have yet to achieve the kind of economic growth we want to see - growth of at least 5% annually. Only then will Croatians truly feel that their standard of living has improved,” she said.
She also underscored the need for judicial reform and sustainable health care and pensions systems.
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