"Pensions are expected to go up by up to 5 percent," Minister for Labor, Pension System, Family, and Social Policy, Marin Piletic said on Wednesday, referring to what state agency Hina described as "the largest pension indexation since this model exists."

Hina did not clarify since when does this model exist, nor how much would a five percent increase total in monetary terms.

Croatia has about 1.2 million pensioners, making up close to a third of the country’s entire 3.9 million population. Their pensions are paid from the public pension fund, and the amounts they receive are periodically calculated using a formula which references average salaries. The average monthly pension is currently little under 3,000 kuna (€400) and the next re-calculation is expected in September.

In an interview with Nova TV, Piletic was also asked about reported price hikes at retirement homes. In Croatia, public retirement homes fall under the jurisdiction of local government, who appoint all management personnel, and who are described in bureaucratic speak as “founders”. The same system applies to hospitals, schools, kindergartens, local media outlets, and a variety of other public services..

Hina cited Piletic as saying that he would “talk with county heads as their founders, and respond in line with the state of the national budget.”

“The problem is the lack of capacity at all homes in Croatia, which is why we expect a tender in August where we want to use 370 million kuna (€49 million) for 800 new accommodation units.”

Speaking of the new labor bill which is expected to introduce new regulations for the so-called gig economy, which is estimated to employ more than 20,000 people, Piletic said that the new amendments “aimed at giving them equal labor rights.” Hina did not clarify what this means.

Asked if employers would now be required to pay for electricity and the Internet bills for people working from home, Piletic said that the new bill “envisaged that.” Piletic also commented on the record-high employment figures and the fact that businesses are having a hard time filling up vacancies.

Piletic said that Croatia “has never had more employed persons” according to data from the public pension fund HZMO, which tracks how many Croatians are paying social contributions into the fund, i.e. how many people are in gainful employment and receive a salary.

“These are good indicators for the Croatian economy,” he said. “We have provided a variety of tools so that employers can find labor.”

Asked if the law also helps businesses import foreign workers, Piletic said that “it depends, on a case-by-case basis.”

As Croatia is part of the European Union, other EU nationals are free to work in the country with no restrictions. However, very few of them are attracted to Croatia, so in recent years the gaps in the labor market have are increasingly filled with laborers imported from non-EU countries such as Nepal, Ukraine, or the Philippines. Up until 2021 these were regulated by a system of quotas.

“On 1 January 2021, the government… abolished quotas. In 2020, we had a little under 40,000 foreigners in the country, last year there were 82,000 foreign workers in Croatia. This year, we already have 52,000 foreigners on Croatia’s labor market to date.”

(€1 = 7.52 kuna)