Expectations for Croatia's economy improved in January for the second month in a row on the back of a wave of optimism in the services sector, and business leaders again underlined the need for workers, the European Commission said in a report on Thursday.

In January, the Economic Sentiment Indicator in Croatia was 90.2 points, up by 1.4 on December.

Services confidence increased the most, by 4.3 points, followed by industry confidence (+2.5) and construction confidence (+2.4). Consumer confidence increased by 0.2 points.

Retail confidence decreased by 0.4 points.

Business leaders said this month they might step up hiring in the period ahead and this index increased by 2.2 points to 93.7.

Deterioration in EU and euro area

Economic sentiment in the EU and the euro area deteriorated in January, reflecting a wave of pessimism in retail.

The EU ESI decreased by 0.6 points to 91.2, while the euro area ESI decreased by 0.9 points to 91.5.

Retail confidence decreased by 1.6 points in the EU and by 1.7 in the euro area. Services confidence decreased by 0.5 points in the EU and by 0.7 in the euro area.

On the other hand, industry confidence went up by 1.2 points in the EU and by 0.9 in the euro area.

Construction confidence was stable in the EU and increased by 0.3 in the euro area.

The Employment Expectations Indicator decreased by 1.3 points in the EU and by 1.6 in the euro area.