"Expectations for Croatia's economy in June 2021 reached their highest level since the start of the coronavirus pandemic, encouraged by optimism in the retail sector, with employers again signalling that they plan additional hiring," state agency Hina reported on Tuesday, summarizing a report released by the European Commission.

The Economic Sentiment Indicator (ESI) for Croatia increased in June by 1.5 points compared to May, to 108.1 points, the highest level since February 2020, just before the pandemic, according to European Commission’s monthly report.

Hina did not explain what the points system means.

Expectations of business leaders in the retail sector increased the most, increasing by 15.6 points. Stronger optimism was reported also in the services sector, whose indicator grew by 5.4 points. The sentiment in the construction sector improved only mildly in relation to May, with the sector indicator growing by 1.1 point.

On the other hand, consumer expectations decreased as evidenced by a 2.2 point drop in the relevant indicator, and the sentiment in the industry was subdued as well, with the sector indicator going down by one point. Nonetheless, business leaders signal that they plan increased hiring, as evidenced by an increase in the Employment Expectations Indicator of 5.3 points, to 110.8 points.

Optimism in Europe

In June 2021, the Economic Sentiment Indicator (ESI) hit a 21-year high, outstripping by far its long-term average and pre-pandemic level, the European Commission said.

The ESI in the EU rose by 3 points to 111.5 points and in the eurozone it rose by 3.4 points to 111.6 points.

The indicator reflecting the expectations of business leaders in the services sector grew the most again in both areas, by six points in the EU and by 6.6 points in the euro area. Expectations increased more strongly also in the retail sector, by 3.8 points in the EU and by 4 points in the eurozone. Consumers, too, showed increased optimism, with the relevant indicator going up by 1.5 points in the EU and by 1.8 points in the eurozone.

The sentiment among business leaders in the industrial sector improved only mildly, with indicators rising by 0.9 and 1.2 points respectively. Expectations in the construction sector were almost unchanged in relation to May.

Employers again signaled that they plan increased hiring, with the EEI in the EU going up by 1.2 points to 111.5 points and by 1.6 points in the euro area, to 111.6 points.