Bleak financial outlook for Croatia in 2009

Economic experts predict that the international financial crisis will hit certain segments of Croatia’s economy.

Izvor: B92

Thursday, 23.10.2008.

14:54

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Economic experts predict that the international financial crisis will hit certain segments of Croatia’s economy. Experts say that it will have the biggest impact on construction and tourism. It is almost certain that the financial crisis will lead to people traveling less. Bleak financial outlook for Croatia in 2009 Germans, Italians and other European are expected to have less money, which will restrict the amount they have to spend on holidays and travel. Even though the world crisis has yet to be felt significantly in Croatia, experts are certain that next year will be a lot harder financially. Zarko Primorac, an economic analyst for Deloitte, says that he is certain that the Croatian economy will feel the repercussions of the crisis, “because it is structured with sectors that are very vulnerable to world trends.” Independent unions are even more afraid for the construction industry and are predicting a significant fall in the price of property. Goran Bakula of the Independent Croatian Union says that he expects wages to increase by an average of 200 kuna (about EUR 28), but that most wages will stay the same, while pensions will increase by 50 kuna (about EUR 7). However, he said that most families will be going another EUR 560 in debt. Unions predict drastic falls in the price of apartments in Zagreb, by as much as EUR 600 per square meter. One of the biggest problems is that citizens are already deep in debt and are going even further into debt to ensure their everyday survival. “The fact alone that income is falling or stagnating will endanger this debt situation for two reasons: one is that people will find it hard to go in debt again to maintain their standard of living, and the other is the payment of old debts. Over the next year or two, a lot of the things we have got used to will become luxuries,” Primorac warned.

Bleak financial outlook for Croatia in 2009

Germans, Italians and other European are expected to have less money, which will restrict the amount they have to spend on holidays and travel.

Even though the world crisis has yet to be felt significantly in Croatia, experts are certain that next year will be a lot harder financially.

Žarko Primorac, an economic analyst for Deloitte, says that he is certain that the Croatian economy will feel the repercussions of the crisis, “because it is structured with sectors that are very vulnerable to world trends.”

Independent unions are even more afraid for the construction industry and are predicting a significant fall in the price of property.

Goran Bakula of the Independent Croatian Union says that he expects wages to increase by an average of 200 kuna (about EUR 28), but that most wages will stay the same, while pensions will increase by 50 kuna (about EUR 7).

However, he said that most families will be going another EUR 560 in debt.

Unions predict drastic falls in the price of apartments in Zagreb, by as much as EUR 600 per square meter.

One of the biggest problems is that citizens are already deep in debt and are going even further into debt to ensure their everyday survival.

“The fact alone that income is falling or stagnating will endanger this debt situation for two reasons: one is that people will find it hard to go in debt again to maintain their standard of living, and the other is the payment of old debts. Over the next year or two, a lot of the things we have got used to will become luxuries,” Primorac warned.

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