EU economic sentiment worsened in January 2022 reflecting concerns in the services sector due to the consequences of the fast-spreading Omicron variant of the coronavirus, while the Croatian economy showed signs of optimism, according to a European Commission report released on Friday.

In Croatia, the Economic Sentiment Indicator (ESI) increased by 0.7 points from the revised value for December 2021 to 110 points in January 2022.

Services confidence increased the most (+3.9 points), followed by construction (+1.9 points) and industry (+0.2 points). On the other hand, retail trade and consumer confidence declined by 4 points and 3.7 points respectively, reflecting concerns over price hikes.

The employment expectations indicator fell by 3.3 points, while the economic uncertainty indicator remained virtually unchanged from the end of 2021.

EU developments

In January 2022, the ESI eased further in both the EU (-1.4 points to 111.6) and the euro area (-1.1 points to 112.7) but remained high overall.

Pessimism was most prominent in the EU services sector and the euro area construction sector, whose indicators fell by 2 points each.

Industry confidence fell both in the EU and in the euro area, by 0.9 points and 0.7 points respectively. Consumer confidence declined by 0.4 points in the EU and by 0.1 point in the euro area.

Only retail trade confidence rebounded, by 2.2 points in the EU and by 2.7 points in the euro area.

The employment expectations indicator fell by 0.5 points in the EU and by 0.2 points in the euro area, while the economic uncertainty indicator increased by 0.4 points in the EU and decreased by 0.2 points in the euro area.