According to a recent report by the European Commission published on Monday, Croatia's Economic Sentiment Indicator (ESI) in April was 110.3 points, inching up slightly from 109.5 in March, which was attributed to optimism about retail trade. However, this was in contrast with the rest of the EU and the euro zone, where the economic sentiment is reportedly hampered by inflation and the war in Ukraine.

By component, the strongest single improvement in Croatia was in retail trade confidence, as it jumped by 6.9 points from March. Company managers polled reported an above-average improvement in doing business in the coming months, their expectations increasing by as much as 17 points.

This was followed by industry confidence increasing by 1.8 points, and consumer confidence improving slightly, by 0.9 points. Construction companies expect a worsened business climate in the months ahead, with the construction confidence index dropping by 1.2 points, and a slight deterioration was also registered in the services sector confidence, which fell by 0.7 points.

In Europe, the sentiment has stabilized after an initial shock earlier caused by the outbreak of the war in Ukraine and the economic sanctions against Russia. The ESI in the EU and the euro zone dropped substantially by 1.7 points after sinking by 5.3 and 5.4 points respectively in March.

The highest levels of pessimism in the EU and the euro zone was recorded among managers in the retail industry, due to high inflation rates. Inflation has caused concern among consumers too, with consumer confidence falling by 1 percentage point in the EU. The decrease in the euro zone was 0.4 points.

Due to problems in the procurement of raw materials and transport, industry confidence fell by 0.8 points in the EU and 1.1 points in the euro zone. European business managers said they expected lower employment in the coming months, with the Employment Expectations Indicator decreasing in April by 1 point in the EU and 1.1 points in the euro zone.