The Croatian economy is growing four times faster than the European average, unemployment is at a record low and economic growth has never been higher - all of which is recognised by the rating agencies. These achievements were emphasised by Finance Minister Marko Primorac at an economists' conference in Opatija.

“The progress made in the last eight years is truly fascinating,” said Primorac, “both in terms of fiscal consolidation with the reduction of public debt as a percentage of GDP and GDP per capita, which has risen from €11,000 to €22,000.”

Another side of Croatia

On the other hand, there seems to be another side to Croatia – a country where 20% of people are at risk of poverty, purchasing power is falling and around 400,000 inhabitants have left the country in the last ten years. It is a country where around 300,000 pensioners receive a pension of €300 or less.

“There are many people who cannot live on their income and we must recognise the inflationary pressures that undeniably exist. We can compare the situation with eight or ten years ago and say that it is better, but the reality is that Croatia is unfortunately progressing slower than comparable countries,” said Darko Tipuric, President of the Croatian Economic Association.

Primorac: It is better than it was in 2016

Minister Primorac does not see the situation as so gloomy. He admits that there is poverty, but argues that the situation is better than in 2016. He also disputes the claim that inflation has cancelled out wage and pension growth.

“Look at how much milk, eggs, bread or oil you could buy with an average salary in 2016 compared to today. Present these figures; I think they would be interesting,” Primorac said.

However, economists warn that statistics can be deceptive. Reforms are needed and policy must focus on those most in need, of which there are many – which even the statistics confirm.

“Statistics are always an accurate sum of inaccurate data, or vice versa. The minister may be right on average, but on the other hand, there is a layer of 20-25% of the Croatian population that these statistics do not reflect. That is the problem,” emphasised Tipuric.

Addressing rising prices

When asked about the constantly rising prices, the minister suggested a strategy to put pressure on retailers and producers. While the government cannot force them to lower prices, he suggested that others, such as the media, could help.

“You, the media, have a lot of power. You can shape public opinion and create a social climate that gradually addresses this issue. Call the retail chains, call the producers, talk to them, put pressure on them and see what’s going on,” Primorac advised.

Inflation rates are among the highest in Europe

According to Eurostat, Croatia has one of the highest inflation rates in Europe. The opposition agrees that the situation is anything but idyllic for many citizens, especially pensioners.

“I don’t know how Prime Minister Plenkovic can fail to see this. But when his finance minister can claim in parliament that there is no poverty or homelessness in Croatia, nothing surprises me anymore. We have called for a focus on the real problems that affect our citizens,” said Nikola Grmoja, a member of parliament from the Most party.

“This is what our people see every day when they go to the shop, when they buy shoes or nappies for their children or when they buy basic necessities – not luxury items or anything else,” said Sasa Djujic, an SDP party MP.

Regardless of which Croatia to focus on, the conference in Opatija emphasised the need to increase agricultural production, reform public administration and revive industrial production as the basis for a strong and competitive economy.