Energy renovation of buildings The programme of energy renovation of buildings is one of the first public investment programmes
Croatian Employers Association Croatian entrepreneurs believe they operate in a hostile business climate, with increasing criminal liability and repressive measures
Interview: Mihael Zmajlović, Mayor, Jastrebarsko We look for investors in Europe not wait for them to come to us
ENERGY PAGES 2-3
ECONOMY PAGE 4
INTERVIEW PAGE 5 2008 2009 2010 2011
Croatian Business & Finance Weekly Established in 1953 Monday / 21st May / 2012 Year V / No 0200 www.privredni.hr
S U P P O R T E D
DOUBLE CENTURY mazingly, this is the 200th edition of Privredni vjesnik International yet it does not seem so long ago I was writing about our first century! Much has happened both globally and in Croatia; globally, a crisis of extreme intensity affecting us all and in Croatia (and on a more positive note) our onward march towards accession to the European Union. During the last one hundred issues (and indeed from our inception), we have faithfully relayed to you all asi necessary ffor pects of Croatia your needs; this we shall continue to do into the future. Accession will take place in approximately 13 months; this period will be of special importance to both you and us. There is still much ground to be covered and it is our intention to bring all relevant economic aspects to you as soon as the information reaches us. We shall continue to provide economic data on a weekly basis but will also provide information via our web page at the following link: www.privredni.hr Thank you for your ongoing interest in the Croatian economic environment. We shall continue to make PVInternational equally relevant in the months ahead.
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Darko Buković, Editor-in-Chief
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pvinternational pv international C R O A T I A N
C H A M B E R
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E C O N O M Y
PRE-ACCESSION ECONOMIC PROGRAMME FOR CROATIA
DIFFERENT OUTLOOK FOR THIS YEAR The Croatian Finance Minister bases his optimism on an anticipated 7% growth in investment, an element bypassed by the outlook and analysis from the European Commission Lada Stipić-Niseteo n its Pre-accession Economic Programme (PEP) for the next two years that Croatia presents to the Europe, as other candidate countries also do, Croatia has proven to be more ambitious compared with other analysts, including the Commissions team that drafted the spring outlook of economic trends. The Croatian Government predicts 0.8% growth for this year, while the European Commission and other institutions believe recession will continue, with a cumulative fall for 2012 of 1.2%. The government outlook is not realistic according to EC analysts. They support their hypothesis by repeating that other similar analyses (IMF, HNB, EC spring outlook) are also reserved.
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Croatia the only candidate in recession The introduction of the EC document on PEP countries in the European ‘waiting room’ points out Croatia is the only country in the group of candidate countries
(Iceland, Turkey, Macedonia, Montenegro and Serbia) still in recession. Even though other countries operate in the same environment and with a similar relation to the eurozone and internal EU market, they have managed to pull through, so the global crisis cannot be held responsible for a localised recession. Figures will improve,
The European Commission predicts Croatia will remain in recession during 2013 Finance Minister Slavko Linić reassured Brussels a few days ago, after his lunch with ministers of candidate countries and EU colleagues. Linić bases his optimism on an anticipated 7% increase in investment. Due to the elections, Croatia handed in its PEP later than the standard January deadline. The document contains the first signs of the measures proposed by the new government.
Recovery postponed The EC spring outlook, only two weeks old, predicts Croatia will remain in recession this year. Any recovery is postponed for 2013, with a note that the Croatian economy is suffering a strong headwind, especially since the problems in Italy and Slovenia overlap with Croatia. According to analysts from the General Administration for Financial and Monetary Affairs of the EC, the spring outlook took into account the government investment plans in order to coincide recovery in the EU and the eurozone with the first infrastructural investment of state companies as well as investment related to preparations for EU accession. The following year is also the year Croatia will join the EU if there will be no neighbourly outbursts and unpleasant surprises in the judicial system. It seems it will also be the year of the crisis exit, all analysts agree, regardless of their country. It is also significant that not a single analysis hints at positive changes when Croatia joins the EU on July 1, 2013.
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Privredni vjesnik Year V No 0200
Krunoslav Flegar, Director, Flemont – Zagreb
Substantial energy saving Thermal façade insulation, triple pane windows and solar roof panels will soon become standard onstruction and renovation trends are taking a radical turn in the direction of energy efficiency. Thermal façade insulation (15-20 cm), triple IZO glass windows and solar roof panels will soon become standard. These elements achieve low-energy construction standard and a maximum energy consumption of 40 kWh/ m² a year, much less compared with non-insulated houses that expend over 200 kWh/m² a year. Additional insulation, air recirculation venting systems and heat pumps for floor heating or cooling brings us closer to a construction standard knows as ‘the passive house’ that consumes just 15 kWh/m2 per year. Passive houses indeed use ten times less energy than houses built 20 or 30 years ago. Passive architecture is characterised by buildings with large glass surfaces turned towards the south to allow weak winter sun to penetrate as deeply as possible, heating the space. Furthermore, various types of heat pumps are also used. With a small amount of power, they raise the temperature of the ground to 40-50 ºC through geoprobes and ground exchangers. In addition to enormous energy saving, passive houses offer pleasant and healthy living conditions since they have ample natural light, floors and walls are always warm, and smart ventilation system constantly provide fresh and filtered air as needed, ideal for people suffering from allergies. In these houses, heating and cooling is never turned off, simply because there is no need due to extremely low consumption.
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IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription
( €40 million savings in water
ENERGY RENOVATION OF BUILDINGS
NEW MARKET OPE AND MACHINE EN
The programme of energy renovation of buildings is one of t implemented based on the ESCO model, for a long time ope work; therefore it is not surprising that Croatian companies a Drago Živković he energy renovation of buildings programme is one of the first public investment programmes announced shortly after the composition of the present government. Although it took almost half a year to draft, Minister of Construction, Ivan Vrdoljak, believes the quality of the proposed solutions justifies the waiting. The model proposed by the Ministry, together with the Government Centre for Monitoring Energy Sector and Investment Affairs, is based on the ESCO model, applied for decades in the USA and EU. ESCO stands for Energy Service Company and it defines a model according to which the provider of energy services (the ESCO company) offers measures for promoting energy efficiency which result in verifiable savings of energy. The measures usually include a series of interventions on buildings, not only renovation of façades, but also the replacement of installations or fitting independent energy production systems, for example, solar collectors. All work proposed by the programme would be funded by HBOR loan with a payment deadline of 14 years and an annual interest rate of 4%. After repayment of the loan that must not exceed the planned saving, the investor (state or local administration) has a more energy efficient building and lower costs.
T Technological progress enables us to use renewable energy sources more efficiently, which is why RES driven systems are now worth fitting even without state subsidies. For the same reason it is crucial to inform the public as much as possible, encouraging them to build and renovate in accordance with contemporary construction technologies since such investment brings returns after 5-10 years, and everything thereafter is considered great saving. Saving water, power and other energy sources is becoming an increasingly important topic, and we as engineers, specialising in adaptations, energy renovation, and low-energy as well as passive construction, receive more related queries and work. It is important to mention that heating and cooling consumes most of the energy - around 40% of total global energy, whereas around 30% is spent by industry and traffic, and the largest cuts are possible in house-building.
FOR PUBLISHER Nikola Baučić +385 1 4846661 uprava@privredni.hr
IMC MANAGER Dea Olup +385 1 5600028 olup@privredni.hr
EDITOR IN CHIEF Darko Buković +385 1 5600003 bukovic@privredni.hr
TRANSLATION Lučana Banek lucanab@gmail.com Mirjana Cibulka mirjana.cibulka@gmail.com
EXECUTIVE EDITORS Andrea Marić maric@privredni.hr Vesna Antonić antonic@privredni.hr
INTERNATIONAL OPERATIONS Ray Fletcher fletcher@privredni.hr
Money available This type of model would not only reduce energy consumption, but would also generate employ-
ment in more sectors and enhance environmental protection. Croatia now uses three to four times more energy in the public sector compared with developed countries, which in average totals 200-250 kWh per square metre. The goal of the programme is to reduce the use to 50-80 kWh per square metre. Funding was secured through the European Investment Bank (EIB) via HBOR. The EIB provided €200 million for the energy renovation programme, and if the interest increases, more funding will be provided, according to the Ministry. The programme opens a new market for the construction and equipment industry, so the interest shown by companies is not surprising. By the beginning of May, 78 project tasks (buildings) had been drafted, which when transformed into investment equates to €58 million. By the
www.privredni.hr Business & Finance Weekly
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( €200 million for energy renewal from the European Investment Bank and HBOR
ENS FOR CONSTRUCTION NGINEERS
the first public investment programmes of the new government, and will be rating in the USA and EU. Energy renovation of buildings will generate a series of new are interested in entering into energy renovation programmes the achieved savings depending on the required investment. Before the Ministry started this project, it was extremely difficult to arrange the implementation of ESCO projects, even though they do not require funding from the public sector, and despite bank guarantees the ESCO company provides as guaranteed saving, Strunje complains. As a result the procedure of arranging ESCO projects lasts for years even now. For example, for five years Rudan have been offering water saving based on the ESCO model in hospitals owned by the Ministry of Health. Annual savings in only seven hospitals Rudan analysed would total €2.3 million. In other words, the Ministry has end of June, the Ministry expects around 300 project tasks and if the plans are achieved, the total value of the investment will soon exceed the planned €200 million. Authentic saving Rudan is one of the rare companies in Croatia specialising in ESCO projects, specifically water saving. Board Member, Željko Strunje, says they are pleased the government decided to promote this business model and he finds
lending conditions excellent. According to Strunje, skilfully implemented ESCO projects carry very low-level risks since part of the existing costs the public sector already pays (electricity, water, heating) is redirected to the ESCO partner, and the other is authentic saving. ESCO projects usually last between 8 and 15 years, and it is extremely important the public sector immediately feels the consequences of saving, that is, to distribute
Energy efficiency in industry
As part of the Third Zagreb Energy Week, a seminar on Energy Efficiency in Industry was held in the CCE Zagreb. Concrete examples for energy saving in industry were presented as well as advantages and disadvantages of using LED lights for illumination in public areas. It was highlighted that total energy consumption in Croatia was 412 PJ in 2010. Transformation losses of this energy totalled 80 PJ, which is an enormous potential for energy efficiency since total annual power demand in households equates to almost the same. (B.O.)
Croatia now spends three to four times more energy in the public sector compared with developed countries lost over €10.25 million since the time when Rudan first sent their proposal, says Strunje. One of rare companies that immediately recognised the benefits of the ESCO project is HŽ Infrastruktura, where Rudan is implementing a project for saving water in the Zagreb railway yard and the main terminal. They have already saved over €1.6 million a year just on water expenses. On the other hand, Rudan has no problems in arranging projects with the private sector since they immediately recognise all the benefits of these projects.
::: news Varteks continues cooperating with Levi Varteks has signed a new fiveyear distribution contract with Levi Strauss Europe for Croatia and other countries in the region, an indication of the value of the 28 years of co-operation between the two companies. Varteks is an exclusive distributor for Levi in Croatia and other countries in the region, selling this reputable American clothing brand in 121 stores throughout regional markets. Boom in bottled water with flavoured additives With consumption of over 100 litres of bottled water per capita, bottled water use in Croatia is almost at the same level of consumption in the mature markets of EU member countries, according to the research conducted by A.T. Kearney, a global management consulting company. Irrespective of the anticipated 2% growth in the Croatian bottled water market by 2015, A.T. Kearney is predicting growth in bottled water with flavoured additives providing additional nutritive or health value. Annual growth rate of this product is expected to be close to 10% in South-East Europe over the next three years. Cheese Festival in Istria The first Cheese Festival will be held in Svetvinčenat from 29th June to 1st July 2012, organised by Dva Roga Co-operative (Zadruga Dva Roga). The aim is to bring together cattle breeders and cheese producers from Croatia and neighbouring countries, enhancing the value and promoting milk and dairy product consumption. A large number of well-known producers in the dairy industry will participate at the Cheese Festival, as well as small producers who will have the opportunity to present their top quality organic products to the general public. The traditional competition entitled Best goat will also be held during the Cheese Festival.
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Privredni vjesnik Year V No 200
::: news
CROATIAN EMPLOYERS ASSOCIATION ‘ENTREPRENEURS DAY’
Downward trend in insurance industry continues The total gross premiums of 27 insurance companies in April 2012 was €0.44 billion, 0.6% down over the same period last year. The total gross non-life insurance premiums, which accounts for 76.48%, stood at €0.33 billion, 1.5% down. Total gross life insurance premiums were €102.65 billion, showing growth of 2.2%. The share of life insurance in total premiums was 23.52%, 1% up.
“We can provide the solution to the problem”, stated entrepreneurs
Higher interest on savings Hypo-Alpe-Adria bank has launched a new product, local currency savings, at fixed interest rates ranging between 4.5% and 5.5% for terms of 6, 12 and 18 months. The minimum deposit is €670 and is available until 14th August 2012. Simultaneously, Hypo Bank has extended their “Wise savings” accounts (savings in Euros) at interest rates ranging between 4% and 5% for 1-year term deposits. Hypo-Alpe-Adria Bank has received €68.7 million in new deposits from the retail sector over the past four months. Euroherc dividend of €26 In 2011, Euroherc insurance reported nett profits of €25.5 million, of which the Management Board proposed to the General Assembly to pay €8 million as dividends. Dividend per share will be €26, with payment expected on the 30th day following the entitlement to dividend payment. Končar dividend of €1.6 In 2011, Končar-Elektroindustrija saw nett profits of €9.42 million, of which €4.1 million will be for dividend payments, in accordance with proposals from the Management Board and Supervisory Board to the General Assembly. Dividend per share is €1.6 and will be paid on the 30th day following the General Assembly. Končar Group created profit of €25.62 million in 2011.
Croatian entrepreneurs believe they operate within a hostile business climate, with increasing criminal liability and the strengthening of repressive measures Drago Živković, Igor Vukić f you are putting us on a pillar of taxpayer shame, we need to create another pillar of bureaucratic shame for mayors, ministers and other civil servants whose decisions adversely affect and deter investment. Irrespective of the hostile business environment in Croatia, we would like to point out that we can provide the solution to the problem”, stressed Ivan Ergović, President of the Croatian Employers’ Association during the opening ceremony to mark Entrepreneurs’ Day. According to him, the unfounded populism adopted by trade unions and directed towards entrepreneurs has been supported by the government in several of its recent decisions. Entrepreneurial criminal liability has been increasing and repressive measures have been strengthening. Irrespective of his support for some recent government moves, such as reduced budget contributions, the preservation of the Croatian credit rating, a lowering of mandatory contributions and the announced launch of new investment, Ergović stressed the fundamental importance of “symmetrical liability” between entrepreneurs and the public sector.
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Importance of regulations Prime Minister Zoran Milanović stated that Croatia would primarily focus on an open society and entrepreneurship in the near term, as well as the close monitoring of liabilities. “We will insist on the im-
portance of order and regulations”, the Prime Minister pointed out. He stated that he also is an entrepreneur in politics, as he invests all his knowledge into a project and is doing it to the best of his abilities; he has to tolerate criticism, undertake risks and fail at times, yet he needs to carry on striving to achieve satisfactory results. The government will attempt to keep abreast of other EU governments, focusing on effective bureaucracy, as is the situation in US and Finland. Countries to the north have developed a strong welfare state and strong entrepreneurship is of primary importance, stated Milanović adding that Croatians will have to focus much more on work and make a large number of intelligent decisions if they want to preserve the Croatian social model. In addition, he pointed out the paradox of a satisfactory GDP per capita irrespective of high unemployment, which indicates high productivity. If employment increased by 70%, Croatian per capita income would be stronger than in countries with a median income. The government is using all
its efforts to preserve shipbuilding as much as possible, Brač stone extraction will continue and the opportunities provided by the European Union need to be captured, Milanović concluded. There will be mistakes Ivo Josipović, President of Croatia, also believes the investment climate needs considerable improvement to motivate exceptional entrepreneurs and enable the state to be a just regulator. Nevertheless, these changes cannot take place overnight, opined Radimir Čačić, Government First Vice-President and Minister of Economy and one of the participants of the roundtable discussion. According to Čačić, the most important government decision has been to lift the burden on those who make money and allow it be carried by the public. The government has started making decisions and there will be many mistakes, stated Čačić. However, he believes it is mere hypocrisy of the real sector to object to the VAT rate increase, since revenue generated by it has been directed towards the real sector.
Entrepreneurs are “working” The Croatian Employers’ Association has conducted research on attitudes towards entrepreneurs amongst 1,200 questioned. The results are mainly negative (in 36% of cases), as expected. According to 36% of those questioned, entrepreneurs work merely for themselves, they do not pay salaries, evade taxes, engage in criminal activities regarding privatisation processes and similar. Nevertheless, 24% of those surveyed have a reasonably positive attitude towards entrepreneurs, since they believe entrepreneurs are struggling to find an exit from the crisis, they employ people and are “working”. Most of those questioned believe Croatian entrepreneurs operate in a hostile environment, whilst a small minority stated entrepreneurs could provide a solution to the crisis.
www.privredni.hr Business & Finance Weekly
INTERVIEW
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INTERVIEW: MIHAEL ZMAJLOVIĆ, MAYOR, JASTREBARSKO
We look for investors in Europe not wait for them to come to us Based on success in promoting strategies for attracting foreign direct investment, Jastrebarsko is included in the top 10 cities of the future in the South European region according to the Financial Times Igor Vukić he Financial Times included Jastrebarsko on its list of 10 cities of the future in the South European region for the year 2012/2013. Based on its success in promoting strategies for attracting foreign direct investment, Jastrebarsko is grouped with Barcelona, Lisbon, Murcia, Valencia, Tbilisi, Subotica, Santa Cruz de Tenerife and Konya as well as Gaziantep in Turkey. The panel evaluated the cities’ economic potential, investment/expense ratio, human resources, infrastructure, life quality, friendly work environment and the promotional campaign for attracting investment. The mayor of Jastrebarsko, Mihael Zmajlović, accepted the award in March in Cannes. He spoke with Privredni vjesnik on the reasons why Jastrebarsko was included on the list as well as the feedback they received in Croatia.
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How did the Financial Times discover Jastrebarsko? Every year the Financial Times publishes an open invitation to European cities to apply for the competition. On the other hand, they research the market themselves, searching for cities which could qualify for this competition, and so they contacted us and suggested we submit our application. They were especially interested in our success in attracting foreign investors. One of our key advantages is e excellent traffic position. The traffic position is important, but is it enough to attract investors? Several years ago, during the period of economic boom, investors came by themselves. However, after the crisis hit, we became aware we needed to take a more proactive approach and show everyone we have many invest-
ment opportunities. At the same time, we invested greatly in the development of the entrepreneurial zone where conditions had been made for concrete investment. Furthermore, we regularly visit European real-estate shows, presenting our proposals to investors and developers.
issue all licences in a short period of time and they cost less. At the start, utilities are free. However, I think our biggest advantage is the traffic connection. The railway station and exit to Rijeka-Zagreb motorway is nearby. This is all very important to companies specialising in logistics.
What were the consequences of the story of your award? The number of investment queries immediately increased. We were contacted by ambassadors from several countries who wanted to introduce our opportunities to their entrepreneurs. We are currently negotiating the relocation of several companies from Zagreb and a large investment in the IT industry. The information provided by the Financial Times has certainly increased the pace of these negotiations.
Business development will attract more people to Jastrebarsko. Are you ready for their arrival? The city’s economic development will definitely be followed by an increasing demand for social infrastructure development. We have already taken that into account. For now we are meeting the accommodation requirements of nurseries, elementary and high schools. Zagreb County is also planning to build a new elementary school that will meet the needs of future development. Our strategy is not based upon rapid urbanisation and concrete. Two thirds of the city is already rural. We have abundant vegetation and aim for stable development and environmental protection. We are known for wine roads that can-
What other business elements that attract investors to Jastrebarsko? In addition to a good location, we offer lower land prices compared with Zagreb. The prices of utilities and fees are also lower. We
not develop if nature is not preserved. We invest in renewable energy sources. One of the more
In addition to good location we offer lower land prices compared with Zagreb important projects concerns the construction of low-energy residential centres where we would encourage the use of the timber, which surrounds us. Do you use European funds? Many aspects are already prepared, and many others were already put in practice. In cooperation with Slovenian and Croatian partners, we implemented a project for renovating the park and part of the Erdödy Castle, which was worth €1.5 million. This created the preconditions for drafting project documentation for the complete renovation of the Castle, estimated between €5 and 6 million. This is a valuable experience on which we will base future projects.
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WE PRESENT
JAZBEC FARM, IVANOVAC
Privredni vjesnik Year V No 0200
BEZ LIMITA, ZAGREB
Equipment always available The concept originated from a period of illness but resulted in a successful company renting and supplying medical equipment
The first private Lippizaner horse farm Over 150 thoroughbred horses bred on the farm with the Jazbec family also involved in organic agriculture van Jazbec is the owner and founder of the Ivanovacbased Jazbec farm. The farm, covering 52 hectares, breeds Lippizaner horses and has been involved in organic agriculture for 12 years. Farming and cattle breeding are core activities. The farm specialises in the growing of particular long-forgotten grains which are now making headway in the market as they can be found in many outlets in the country as well as being purchased on-line. “We have been growing a wide variety of products and producing meat, milk and vegetables over our 12 years of organic farming. Two years ago, we had to reduce our organic product range and decided to focus grain and soya beans. We therefore built warehousing, processing and refining facilities for grain. We produce cereals, wholemeal flour, as well as glazed cereals. In addition, we bake several types of bread and produce homemade pasta without eggs”, stated Ivan Jazbec.
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The farm has a tradition of organic farming and Lippizaner horse breeding covering 25 years and was officially registered as the first private Lippizaner horse farm in 2005. Horse riding school Over 150 thoroughbred Lippizaner horses have been bred on the farm. “We currently own some 20 Lippizaner horses of which 13 are breeding mares. We have been focusing primarily on the selection of studs, colts and mares and fillies”, he explained. The farm has often participated in cultural events and livestock
An almost forgotten ancient wheat grain is grown and is becoming better-known in everyday diets exhibitions winning several awards. The farm has a horse riding school and caters to several groups of young enthusiasts and also provides tourist services by organising group visits to the farm and providing horse riding experiences, fiacre rides in the countryside and horse riding with a guide for more experienced riders. (A.Š.)
he original concept behind the business of Muhamed Demirović began after recovering from a stroke. He identified the lack of providing electrical and mechanical beds together with deficiencies in sanitary transport services. As a result, he created the company Bez limita with the aim of meeting the needs of patients, retirement homes and health institutions in Croatia, Bosnia-Herzegovina and Serbia. His company provides hospital and office furniture to all such outlets including polyclinics and home health care providers. Equipment may be purchased or rented. He has also expanded into organising accommodation in retirement homes.
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Sale and rental services Patients and business partners can get comprehensive information by dialling a toll-free number and the company can provide same-day delivery of hospital beds, chairs, antibedsore mattresses or any other medical equipment. In addition, the company will assemble and repair equipment. Demirović is a general distributor for Hermann
Bock, a well-known German company producing hospital beds and also co-operates with other well-known producers. His business philosophy, which he acquired whilst working abroad, is extremely interesting: the company has adopted an advance payment principle and as a result he has no outstanding bills.
Same-day delivery of equipment is offered “I cannot afford to wait months for invoices to be settled, since I purchase all equipment and pay for it on delivery, so that it can be constantly available”, he explained. In addition, Demirović noted he can feel the impact of the recession, as the financial resources of companies and patients’ are becoming increasingly inadequate. He has recently opened a retirement home near Zagreb equipped to the highest standards with accommodation for 20 people. It includes 24-hour medical care, doctor visits, physiotherapy, diet in accordance with patient medical conditions and to meet their specific needs, and comprehensive services to make them feel as comfortable as possible. (J.F.)
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CROATIAN FOREIGN CURRENCY MARKET Currency
Kuna exchange mid-rate
AUD CAD JPY CHF GBP USD EUR Source: HNB
EUR
7.55
5,860553 5,841499 7,491361 6,283661 9,399661 5,943642 7,546048 WEEK MAY 19, 2012
USD
5.94
15.5.
16.5.
17.5.
18.5.
4.29
7.54
5.91
4.28
7.53
5.88
4.27
7.52
5.85
4.26
7.51
5.82
4.25
7.50 14.5.
CHF
4.24
4.79 14.5.
15.5.
16.5.
17.5.
CONSUMER PRICES
18.5.
14.5.
15.5.
16.5.
17.5.
18.5.
MONEY SUPPLY
Steep fall in first quarter According to data provided by the Croatian National Bank, during the first three months of this year, money supply M1 registered a considerably strong fall in relation to the end of 2011 as result of reduced cash outside banks and deposits.
2.6% dearer in a year This year RBA analysts anticipate average annual inflation of around 3%
Food prices up 3.3%
price rise was seen in food. The highest increase was for fruit (7.6%), meat (6.5%), fish (5.9%), milk, cheese and eggs (3.3%). In terms of housing, prices of water, gas, energy and other petrol increased by 5% year-on-year, mainly due to increased VAT on utility and public services bills. The price of water supply went up by 5.5% per annum, drainage by 9%, electricity by 4.4% and gas by 7.4%. The price of liquid fuel increased by 17.2% year-onyear, raising the price of transportation (by 4.9%).
dominated by energy and food. If energy and food prices are stripped out (which comprise 44% of the consumer price structure), consumer prices increased by 1% per annum. According to areas of spending, 3.3% annual
Visible VAT rate increase On a monthly level, a mild 0.6% growth is the result of higher prices for clothing and footwear due to the end of seasonal sales. By the end of the year, higher the VAT rate will be visible in the
he rate of increase in consumer prices intensified during April, mainly as a result of higher VAT rate yearon-year, which predominantly reflected on products whose demand is more resistant to price changes. According to data provided by the Central Bureau for Statistics, consumer prices increased by 2.6% year-on-year,
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growing annual rate of consumer prices. Prices of crude oil have begun to fall slightly on global markets at the end of April, considering the stabilisation of speculation and lack of stronger recover in the global economy as well as higher demand for oil. However, the possibility of new conflicts emerging in the Middle East should not be excluded, which would certainly raise the price of oil. Demand is not under pressure on the local market. However, prices of electricity and gas increased on May 1, which will generate growth in consumer prices. There is also a possibility this will transfer to other CPI components, according to RBA analysts. This year, they anticipate an average annual inflation rate of around 3%. (V.A.)
At the end of March, money supply (M1) totalled €6.32 billion, €0.7 billion or 10.3% down over the end of 2011. This is mainly a consequence of deposits decreasing by €0.65 billion. Money supply M4 (total liquid funds), including money in circulation, savings and term kuna deposits, foreign currency deposits as well as money market instruments also registered a fall in relation to the end of 2011. At the end of March, the figure was €31 billion, which is 2.3% less in relation to the end of the last year. Year-on-year, M4 increased by €0.8 billion or 2.7%, pointing to a continuation of extremely mild annual rates over the last two years. This was mainly contributed by growing saving and term kuna deposits (by €0.77 billion), and milder growth in foreign currency deposits (by €0.3 billion). The growth in foreign currency expressed in kuna was mainly a result of exchange rate movements, specifically a weaker kuna in relation to euro (by 1.7%). (V.A.)
8 ::: news Lošinj in line with global tourism trends The World Tourism Organisation (UNWTO) is anticipating a 3% annual increase in international arrivals globally by 2030. The profile of the average tourist has changed and therefore changes are necessary also in tourism propositions, stated Javier Blanco, Director of UNWTO addressing associate members during his recent visit to Mali Lošinj. He also added that Mali Lošinj has huge potential and is abreast of global tourism trends. Knight tournament at the Peasants’ Revolt Museum A knight’s tournament will be held on 2nd June at the Gornja Stubica-based Peasants’ Revolt Museum. A one-day “journey through time” has been held at the museum since 2000 and will comprise of a medieval fair. Visitors will be able to see the ‘military camps’ of a large number of associations from Croatia, the Czech Republic and Slovenia. Introduction to the season The 7th Festival of Local Food, Drink and Gastronomic Delicacies, Souvenirs and Folklore – A Blend of Green and Blue – will be held from 1st to 3rd June in Biograd na Moru. The festival is an introduction to the tourism season and comprises a large number of people in hotel industry and catering and small business owners from Biograd na Moru and throughout Croatia as well as some European countries. Hidden charms of Malmsey and Teran wine varietals
A one-hour wine-tasting event entitled Hidden Charms of Malmsey and Teran wine varietals will take place during the 23rd ATP Vegeta Croatia Open tennis tournament held from 5th to 15th July. There will be a different wine topic covering Malmsey and Teran wine varietals each day, with particular emphasis on wines from the Buje area. The wine tasting will be managed by Istrian wine producers and Croatian Sommelier Club experts.
Privredni vjesnik Year V No 0200
CROATIA RANKS 16TH IN EUROPE AND 33RD IN GLOBAL TOURISM REVENUE
EU funding for tourism European tourism accounts for 50% of global tourism. Nevertheless, this share will decrease in the near term due to continuous tourism development in Asia Krešimir Sočković he tourism industry generates 5% of total European Union GDP. It directly employs 10 million people and indirectly this figure is considerably higher; it accounts for 10% of European Union GDP and over 20 million staff are involved. The global tourism industry has been growing at 4% and in Europe at 8%. “Europe is aiming to be perceived as a unique and attractive tourist destination and Croatia needs to establish its position. From 2007 to 1st July 2013 around €1 million from pre-accession funds was and will be available for Croatia for all areas of the economy and we have used just 40% of these funds to date”, stated Leila Krešić Jurić, Director of the Tourism Department at the Croatian Chamber of Economy during the workshop entitled “EU tourism policy and support programmes for the tourism sector” held on 11th May at the Zagreb Fair during the CroTour International Tourism Fair.
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€1 billion per year “Starting from Croatian EU accession on 1st July 2013 until the end of that year, €445 million will be available and thereafter €1 billion per year”, stressed Leila Krešić Jurić. Tourism is a multi-dimensional sector covering several areas of operation and has an immense impact on other areas of the economy, stressed Vesna Klarić, Consultant at the Croatian Chamber of Economy.
“Croatia ranks 16th in Europe and 33rd globally in terms of tourism revenue European tourism accounts for 50% of global tourism, although this share will decrease in the near term due to the continuous development of tourism in Asia. Competitive and
Tourism through Events, The Support Programme for Tourism Development in Developing Areas and Safe Visitor”, noted Kapović.
sustainable tourism is currently considered essential for Europe, with priority going to top quality and an attractive image”, added Vlasta Klarić. Calypso and Eden, both European Union programmes, are intended for European and Croatian tourism, pointed out Mate Kapović, Consultant at the Department for Bilateral and Multilateral Co-operation at the Ministry of Tourism. “The Ministry of Tourism has prepared 8 programmes for support and incentives to develop the competitiveness of Croatian companies. Total value of for 2012 is €4.25 million and the programmes are entitled Innovative Tourism, A Step Forward, Knowledge for Quality, Together towards Competitiveness, EU Excellence,
World tourism industry is growing at 4% and 8% in Europe
Actual Projects €96 million was and will be available from pre-accession funds for tourism activity from 2007 to 1st July 2013, and an additional €92 million will be available commencing 1st July 2013 until the end of that year, stated Nataša Filipović, Board Consultant for Regional Competitiveness Operational Programmes at the Ministry of Economy. She added that the current priorities are financing in order to develop
competitiveness, technology and knowledge transfer, fostering research and development, as well as the development of regional infrastructure. Successful actual projects such as the Faust Vrančić Memorial Centre, VIOR project – the town of Vinkovci, the blending of traditional heritage in tourism and Czech tourism projects financed from structural funds have already received EU funding in accordance with the programme and were presented during the workshop. Projects will be implemented after Croatian EU accession.