The coronavirus pandemic is increasingly affecting the Croatian economy, with small businesses suffering the most, showed the survey of the Croatian Chamber of Economy (HGK).
The HGK survey covered some 2,700 companies, and as many as 95 percent reported declines in turnover. Over a quarter of the surveyed businesses reported they had suffered declines of 100 percent.
Three quarters reported a drop in production, while a fifth had seen their production fall by 100 percent. Supply chains have also been hurt by the outbreak, with 61 percent of companies reporting problems.
In such circumstances it is no wonder that 42 percent of those polled are considering layoffs and as many as 37 percent are thinking of closing down completely, the HGK said.
The unprecedented restrictions imposed nationwide in an attempt to stem the coronavirus pandemic are bound to hurt Croatia’s tourism and hospitality industries in particular, which account for some 20 percent of the country’s GDP. Transport and export businesses have suffered downturns as well.
“The coronavirus crisis will not spare anyone. We need to urgently help the most affected sectors, we need to exempt them from paying all dues, we need to co-finance wages for their employees and grant moratoriums on loan repayments,” HGK chairman, Luka Burilovic, said. “We must act proactively and preventively, and not just react to what is happening to us today.”
As for labour shortages, the survey showed that some 27 percent of companies are suffering problems caused by sick leave or self-isolation.
Last week, the government proposed an economic rescue package worth 30 billion kuna (€4 billion). The new legislation includes a three-month grace period for tax payments valued at 12 billion kuna (€1.6 billion), another 5 billion kuna (€660 million) in wage subsidies for struggling businesses, grace periods for payment of loans to commercial banks and the state-owned development bank HBOR, and others.
READ MORE
However, some entrepreneurs consider the measures to be too weak a response to the threat of economic downturn and the possibility of hundreds of thousands of layoffs.
Their group, which counts some 60,000 small businesses and trades, called for the Prime Minister Andrej Plenkovic to sack the Economy Minister Darko Horvat and form an economic crisis team which would have representatives from the business and economy sectors.
“The measures adopted to date are not enough, they are too weak to stop the big unemployment wave which, according to our worst-case scenario estimates, will hit more than half a million people within the next three months,” the group said.
A poll conducted among the group’s members showed that only 6.8 percent of them planned to accept and make use of the government measures, while a staggering 68 percent said they were waiting for the government to put forward better proposals. Some 9 percent said they would rather choose extreme options such as massive layoffs or closures, the Lider business weekly reported.