Labour Minister Josip Aladrovic said that the main topic discussed by the Economic and Social Council (GSV) on Monday was the labor market and the shortage of skilled labour, noting that "greater shocks are expected on the demand side than on the supply side."

Speaking to the press after the meeting, Aladrovic said wages were expected to increase in the future as a collateral effect, adding that statistics showed ongoing wage growth in the previous months.

“Next year, when the government assumes the chairmanship of the GSV, we expect (wage growth) to be one of the main topics and I am sure that in cooperation with the Croatian Employers Association and trade unions we will find answers to all the challenges facing us in that regard,” he said.

Responding to question from the press, Aladrovic said that in the coming weeks he would unveil active employment policy measures for next year, adding that a new re-skilling system, financed from the national recovery and resilience plan, would be launched on 1 April.

As for the unions’ demand for 13th month pay, Aladrovic said that this was “definitely unrealistic” because it would be a great shock to the budget in a country still recovering from the crisis caused by the COVID-19 pandemic.

Union representative Kresimir Sever said information technology, digitalisation, robotisation and artificial intelligence were changing the world of labour, and that models should be agreed to encourage employers to plan their needs accordingly, workers to undergo upskilling or reskilling, and the government to ensure funding for this purpose from the national recovery and resilience plan and the EU.

“In the time ahead a huge number of jobs will be lost, while at the same time new ones will be created that will require new knowledge and skills and ensure new employment,” Sever said, noting that Croatia was extremely slow in hiring highly skilled labour.

Commenting on growing inflation, Sever said that it mostly affected low and average income households. Expected increases in natural gas and electricity prices might cause further price increases as the situation with oil prices remains uncertain, Sever warned.

He recalled that expenditure on food accounted for 13 per cent of the average household budget in the EU and 27.2 per cent in Croatia. “The only solution to this situation is to increase wages because there is no other way to prevent such a shock,” Sever said.

HUP president Mihael Furjan said that the key problem of the Croatian economy was low employment and that increasing it could resolve a lot of structural problems and increase GDP.

“In the time ahead, it will be key to employ 100,000 workers and more. The HUP is of the view that all obstacles preventing and hampering employment in sectors that need labor should be removed. In Croatia, these sectors are ICT, construction, health care and social welfare. The HUP supports changes that will lead to greater employment and greater competitiveness of the economy,” Furjan said.