Brexit unlikely to hurt Croatia's economy, chamber of commerce HGK says

Brexit unlikely to hurt Croatia's economy, chamber of commerce HGK says

Brexit unlikely to hurt Croatia's economy, chamber of commerce HGK says Izvor: REUTERS

The United Kingdom's exit from the European Union, scheduled to take place on Friday, is not expected to leave a significant dent in Croatia's economy, the national chamber of commerce HGK told state agency Hina on Thursday.

"Looking at overall bilateral economic relations between the two countries, which are relatively modest, and the fact that Croatia has been in the European Union since 2013, according to our estimates the United Kingdom's exit from the European Union should not have considerable consequences and a direct effect on the Croatian economy and the operation of Croatian businesses," HGK said.

Trade with the UK accounts for 1-2 percent of Croatia's total exports and imports, and British tourists generate about 4.5 percent of the nation's foreign currency revenues from tourism. Brexit, which might lead to slightly lower demand from the British market is not likely to have any serious effect on Croatia's economy.

On the other hand, it could have a larger effect on some types of local businesses, such as pharmaceutics exporters, which account for 15 percent of total Croatian exports to the UK.

HGK also mentioned possible secondary effects such as delays in investment projects, the possible introduction of visas or other restrictions on EU citizens for doing business in Britain, and possibly new barriers to cross-border services.

An indirect impact is also possible as a result of an expected slowdown in growth in EU member states that are themselves important trading partners for Croatia, such as Germany, Italy, Austria, and Slovenia.

The average share of UK in Croatia's total foreign trade has ranged between 1.2 and 1.7 percent in recent years. In 2018, the UK was Croatia's 18th strongest trading partner with a share of 1.3 percent, when it totalled €514.2 million.

Croatia's exports to Britain stood at €218.4 million in 2018, making it Croatia's 15th largest export market. On the other hand, imports from the UK reached €295.8 million in 2018, making the UK Croatia's 20th largest import market.

The UK was the eighth largest investor in Croatia between 1993 and the end of 2018, investing a total of €1.03 billion. The largest single investment so far was in 2015 when British American Tobacco bought the Rovinj Tobacco Factory for €505 million.

According to data supplied by the state statistics bureau, some 820,000 Britons had visited Croatia in 2018, an increase of 9.4 percent over 2017. They accounted for roughly 5 percent of all incoming tourists that year.

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