Economy Minister Coric optimistic about Croatia’s 2022 GDP growth prospects

NEWS 01.04.2022 14:40
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Source: N1

Minister for Economy and Sustainable Development, Tomislav Coric, said on Friday that the year 2022 would see more GDP growth, and that repeating 10 percent growth from 2021 "could" happen again.

“I believe that the Croatian economy will show in 2022, just as it did in 2021, the kind of resilience that showed the way towards reaching the EU average,” Coric said at a meeting of exporters, organized by the Lider business weekly.

Recalling Croatia’s growth rate of more than 10 percent in 2021, Coric said that this year could be like that as well. “That is our goal and I believe that with good exporters, we can make it happen,” he said.

“Croatian exporters share the fate of all European exporters who are in any way connected with the Russian Federation, while the situation is somewhat easier for exporters with diversified portfolios, whose business is not predominantly oriented to Russia,” he said.

Croatia does not have too many companies that are exposed to the Russian market, he said, adding that the current situation could be overcome by companies expanding their market to other European countries, while the government would help by spurring competition, primarily by enabling greater energy efficiency and lower production costs.

Coric announced a 1.9 billion kuna tender to be published by the end of Q2 2022 for an energy efficiency scheme, which should help the manufacturing industry increase its capacity. “Some of the exporters have liquidity problems due to a decline in business in the Russian Federation,” he said, noting that the Croatian Bank for Reconstruction and Development (HBOR) would step in to help them.

DIV Group shipbuilder: Situation requires rapid response

Answering questions from the press, a member of the DIV Group Management Board, Darko Pappo, said that DIV was very much affected by the current situation because two major projects were financed by a Russian-owned bank, with EU sanctions against Russia having prevented the completion of the projects and their refinancing.

“We are talking about two loans amounting to €90 million, with our share totaling around €60 million. That is a huge amount of money and this has made us suspend production,” he said, adding that he expected the government to make decisions fast to help the shipbuilding group overcome the situation.

He added that there were end-buyers for both projects, contracts on long-term lease and a repayment schedule, and that, even though state aid is not necessary, the situation requires a prompt government reaction.

The government should support DIV’s proposal for the loans to be refinanced with HBOR funding under commercial terms, and one of the loans should be fully repaid by the end of the year while the other would be repaid over a longer period of time, he said.

“That would ensure the continuation of production and normal functioning,” he said, adding that both the Brodosplit shipyard and DIV Group operate in the black and employ a large number of workers, which is why they believe the government and HBOR should step in.

Pappo recalled that the recent case of Sberbank showed that a prompt reaction by the government was possible.

AD Plastik focusing on new deals 

Marinko Dosen, Management Board chair of plastic car parts manufacturer AD Plastik, said the revenue from the Russian market accounted for 20-25 percent of total revenue and that the company’s two factories in Russia were currently not operating and there was no information on when they could resume operation.

“AD Plastik is an export-oriented company, focusing on new deals and expanding to markets where it will be able to operate,” Dosen said.

As for the rise in energy costs, he said that the cost of energy products had gone up significantly for all businesses and that state aid would be welcome as it would also help them cover the cost of labor for markets that were currently inaccessible.

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