After seeing its economy shrink by 8.1 percent in 2020 due to the coronavirus pandemic and global recession, this year Croatia expects its GDP to return to pre-crisis levels, Prime Minister Andrej Plenkovic said in a state of the nation address to Parliament on Wednesday.

“Although we expected growth of 5.2 percent, after the successful tourist season, which is still ongoing, and growth of 16.1 percent in the second quarter, we believe we could reach annual GDP growth of over eight percent,” Plenkovic said, adding that according to all expectations, Croatia would be among the fastest growing EU economies this year.

“Had it not been for the pandemic and economic crisis, our public debt could have been below 60 percent of GDP already two years from now,” he stressed. The budget deficit is projected at 2.6 percent of GDP in 2022, which would “help us achieve our goal and join the euro area as early as 1 January 2023.”

Speaking of the education system, Plenkovic said that the government would continue to improve the status of teachers, announcing new bills to promote all-day school classes, pilot projects for national exams and trial final school exams, and the competitiveness of science and higher education.

Further increase in parental leave benefits

To reverse the negative demographic trends, Plenkovic announced a further increase in parental leave benefits for the second six months after the child’s birth, which have been doubled in the last five years from HRK 2,660 to 5,654. “Next year we will increase them to HRK 7,500 for employed and self-employed parents, while at the same time introducing 10 days full-pay paternity leave for employed and self-employed fathers.”

The prime minister highlighted the importance of balanced regional development of the country to reduce depopulation and emigration of young people. He said that the government would continue strengthening civil society, protecting the rights of ethnic minorities and promoting a culture of tolerance.

Speaking of the cultural sector, he mentioned the new Electronic Media Act and announced the adoption of the new Sport Act to advance the entire system.

Self-sufficiency in food and energy production for economic sovereignty

He commented on the rise in prices of transport, products and materials in many sectors, stressing the importance of the country’s economic sovereignty by achieving self-sufficiency in food and energy production, sustainable use of natural resources, and sustainable tourism.

As for energy prices, Plenkovic said that the government had responded promptly and stabilised the prices of petroleum products for a period of 30 days and would take other measures if necessary.

“Unlike many other European countries, the prices of natural gas in Croatia are stable and will remain so until 1 April, by which time the heating season will be over,” the prime minister said. He noted that the electricity prices in Croatia were among the lowest among 33 European countries and their stability was due to an energy mix, citing the LNG terminal on the northern Adriatic island of Krk and the Krsko nuclear power plant.

Speaking of post-earthquake reconstruction, Plenkovic said that the Reconstruction Act had been amended to eliminate bottlenecks, accelerate the process and make it possible for earthquake victims to return to their homes.

He also mentioned threats against democracy, saying that priority should be given to maintaining constructive political dialogue and fighting hate speech and fake news. As an example of what disinformation and hate speech could do, he cited the 12 October 2020 terrorist attack on the government building in St Mark’s Square, in which a security guard was wounded and the 22-year-old attacker committed suicide later that day.

Plenkovic said that there were no untouchables in his government and that they wanted to eradicate corruption as one of the main obstacles to building a more just and developed society.

“DORH (the Chief Public Prosecutor’s Office), USKOK (the anti-corruption office) and police do their work autonomously and independently, and investigations are secret. We want penalties to be such that everyone realises that corruption does not pay,” the prime minister said.

Plenkovic also mentioned accession to the euro area and adoption of the euro as legal tender as the government’s priorities. He noted that the citizens had already decided on this at the 2012 referendum on joining the European Union.