Exports are the backbone of every highly developed economy, accelerating development, breaking down old barriers and bringing greater added value, Minister of Economy and Sustainable Development Davor Filipovic said at the Exporters Club organised by the Lider business weekly on Wednesday.

Filipović announced an action plan to reduce parafiscal charges and tax breaks of at least HRK 1 billion by year’s end.

For smaller economies like Croatia, entering foreign markets through export investment activities is one of the key factors for long-term growth, development and stronger competitiveness, the minister said and added that despite the global situation, Croatian companies have recorded strong growth in exports in the last two years.

Filipović noted that 22,500 Croatian companies, or 15%, generate their income from exports. They employ half of all the employees in active companies in Croatia and generate as much as 67% of the total revenue.

He said that the number of exporting companies is growing every year, and in 2021 there were as many as 1,700 more exporting companies year on year.

He recalled that the government is implementing a number of measures to improve the business environment. Since 2017, five rounds of tax reforms have been implemented and entrepreneurs and citizens have received a total of HRK 11 billion in tax breaks. Three action plans have also been adopted to facilitate administrative relief.

An action plan will be drawn up to reduce non-tax and parafiscal levies with tax reliefs of at least HRK 1 billion by the beginning of 2023.

“In the period ahead, we will focus on those sectors that guarantee the strongest and fastest growth of our economy. These are information and communication technologies, pharmaceuticals, biotechnology, clean technologies for the production of solar energy or the use of hydrogen, nanotechnology, robotics, etc,” added Filipović.

The goal is also to increase investment in research and development and innovation to 3% of GDP by 2030, move up in global competitiveness rankings by at least 15 places and increase the exports-to-GDP ratio by a third of the current value.

He also said that the government is launching new projects, especially when it comes to energy, such as expanding the LNG terminal to double its capacity and strengthening the gas pipeline.

“Everything will be done to ensure the best possible position for Croatia when it comes to energy independence in the future and its positioning as the energy hub for this part of Europe,” he underscored.

Lider’s deputy editor-in-chief Manuela Tašler said that they rated Croatia’s current export climate with a score of six, which is one point less than at their previous meeting.

Pointing out the challenges facing exporters in the coming period, she singled out the hint of a recession in the biggest Croatian export markets, especially Germany, and the pressure on suppliers from foreign markets to lower their prices.