ZAGREB, Jan 4 (Hina) - The Croatian Employers' Association (HUP) does not expect either big progress or greater economic growth in 2003, and most employers expect the continuation of the struggle for achieving better conditions for
their business activities. In its assessment of the business 2002 year and projections for 2003, the HUP says that the growth in the Gross Domestic Product will be 3.5 percent this year with the deceleration of the expansion of loans to some 10-15 percent.
ZAGREB, Jan 4 (Hina) - The Croatian Employers' Association (HUP)
does not expect either big progress or greater economic growth in
2003, and most employers expect the continuation of the struggle
for achieving better conditions for their business activities. In
its assessment of the business 2002 year and projections for 2003,
the HUP says that the growth in the Gross Domestic Product will be
3.5 percent this year with the deceleration of the expansion of
loans to some 10-15 percent. #L#
Employers point out that the structure of the GDP in the expenditure
segment shows that in 2002 the basic source of the rise in the GDP
was increasing personal consumption with the expansion of credit-
granting activities of the banking sector, the continuation of
investment in road construction together with the satisfactory
rise in the imports of equipment for investment purposes in the
private sector. This could be treated also as the source for the
further growth in the GDP with the different structure from the GDP
composition in 2002, but a series of other prerequisites should be
met for this aim.
The balance-of-payments current transactions, (in the percentage
of the GDP) will come to -2.2 percent in the new year, while an
inflation rate (retail prices) is likely to be about 3.3 percent,
HUP analysts say.
A deficit in the balance of payments during 2003 will be maintained
at the acceptable three percent of the GDP. This, together with the
good inflow of the direct foreign investments, the dynamics of the
payment of old debts and with the current foreign currencies
reserves, ensures a relatively good situation in the country's
solvency abroad.
The HUP believes that there will be no significant corrections of
the exchange rate of the national currency, given that the current
policy of exchange rate is one of the pillars in the current
economic politics.
HUP analysts forecast the further trend of the moderate reduction
of the unemployment if the process of investment continues in 2003
at the same extent as in 2002.
There are indicators about the recovery of the labour market
through the growing employment, but there is possibility of a rise
in the unemployment primarily due to the cut of in the number of
employees in the public sector.
These indicators show that HUP members as well as the entire
Croatian economy should not expect either great positive or great
negative repercussions for the conditions of business activities.
Concerning the macroeconomic environment, 2003 will see the
continuation of the monetary stability, low inflation and moderate
oscillations of the exchange rate.
Trends warn of a great imbalance in the foreign trade. The flow of
services (income from tourism and transport, transfers from
abroad) are for the time being covering to a great extent the
deficit in the exchange of commodities, but this also heightens
risks. The HUP therefore urges the adoption of a transparent and
trustworthy plan for the reduction of the fiscal deficit at all the
levels of the state authorities.
As regards the microeconomics, employers expect real headway to be
made in rendering the labour market more flexible.
(hina) ms