Croatia´s economy expected to grow slowly but surely

Croatia's economy picked up in the last six months, but its future will largely depend on exports and foreign investment, the World Bank (WB) reports.Croatia's GDP will grow 0,5 percent this year and 3 percent growth is expected in the next year.  This is still slower than in the countries of New Europe, which expect 1,6 percent growth this year and 3,6 percent in 2011.Kasper Richer, the main author of the WB report for EU10 and Croatia says the outlook for the region is still uncertain.  "Although there is a worldwide recovery, unemployment is growing.  The decrease is unemployment growth is expected no sooner than 2011."The WB says the fact that the employment in the region was falling more slowly than GDP is positive.  In Estonia, for example, GDP fell by 14 percent and employment by nine percent; in Croatia, the GDP fell by 5,8 percent and employment by 3,2 percent.Sanja Madzarevic-Sujster, a senior economist at the World Bank said: "Employers have tried to keep their qualified workforce knowing that once the crisis is over it will be difficult to get them back."Although Croatia forms part of this trend, there is a big difference between private and public sectors. Employment in manufacturing and hospitality fell more than GDP, and a similar fall was experienced in construction.  At the same time, sectors like education and health have increased their vacancies, the Croatian daily Jutarnji List reported.The worst off continue to be men and young people because the manufacturing sector and the construction industry were hit the hardest by the crisis.  The same is expected over the next few years because workers with only primary school education and little work experience will have a hard time finding jobs in all sectors, not just construction.Madzarevic-Sujster said: "The upcoming tourist season will improve the situation a bit, but it will not create many quality and long-term positions." Croatia faces challenges in order to speed up economic growth while maintaining stability.This is not possible without reforms, Andras Horvai, the head of the World Bank office in Croatia said.  "There needs to be rationalization of spending, an increase in labor market participation, strengthening of higher education and innovation and the reduction of red tape and business costs," he said.

Source: Croatian Times Online News