Expectations for Croatia's economy in August 2021 reached their highest level since February 2020, which was just before the outbreak of the pandemic, shows a report by the European Commission.

The Economic Sentiment Indicator (ESI) for Croatia grew 1.4 points  from July to 112 points in August, record high since February 2020, shows the EC’s regular monthly report.

Expectations by business leaders in the construction sector increased, with a growth of 2.7 points.

Stronger optimism was also reported in the services and industrial sectors, whose indices grew by 2.1 points.

Sentiment improved mildly in retail, as evidenced by a growth of 0.7 points.  Consumer confidence decreased by 0.7 points.

Business leaders signal that they plan increased hiring, as evidenced by an increase in the Employment Expectations Indicator in August by 0.4 points to 110.6 points. It has outperformed its pre-pandemic level for three months in a row.

Optimism in EU declines

In August, the European Union and the euro area saw a decrease in the Economic Sentiment Indicator (ESI) from its all-time high, slipping in both areas by 1.5 points to 116.5 and 117.5 points respectively.

Expectations of business leaders in both the EU and euro area weakened the most in the services sector, falling by 2.1 points

Consumer sentiment also deteriorated, although more mildly, falling by 0.7 points in the EU and by 0.9 points in the euro area. Expectations in the industrial sector also recorded a similar fall.

Expectations in retail sales remained almost unchanged compared with July while a significant increase was registered in the construction sector with an increase of 1.2 points in the EU and 1.5 points in the euro area.

Employers plan increased hiring, with the EEI in the EU going up by 1 point to 112.6 points. It also increased by 1 point in the euro area, the EC report notes.