Ćorić: Croatia must focus on productivity for the next 10 years

Croatia’s immediate economic figures matter less than a problem Finance Minister Tomislav Ćorić believes should occupy the country for the next decade: productivity.

Speaking at the “Croatia We Need” conference organized by Večernji list, Ćorić said the economy would grow by more than 2% this year. Inflation, he added, should be significantly below the 4.9% rate projected at the beginning of the year.

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The topic of productivity is one that the Croatian economy, all economic policymakers, and all participants in the economy should be completely preoccupied with for the next ten years.

But he urged policymakers and businesses to look beyond current macroeconomic indicators. “The topic of productivity is one that the Croatian economy, all economic policymakers, and all participants in the economy should be completely preoccupied with for the next ten years,” Ćorić said.

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The position of the European Union in relation to the United States is, to put it mildly, bad.

He attributed much of Europe’s widening economic gap with the United States to differences in productivity. More than 70% of the gap in GDP per capita between the two economic areas, he claimed, stems from productivity differences. “The position of the European Union in relation to the United States is, to put it mildly, bad,” he said, warning that Europe could continue to fall behind the United States while facing stronger competition from China and potentially from India and Brazil.

Europe’s demographic trends, limited domestic natural resources, and difficulty reaching agreement among member states on major economic policies add to the challenge, Ćorić said. He pointed to the 11-year discussion over a European deposit insurance scheme as an example of slow integration. “We have a scenario of falling behind, or, in other words, we are falling behind,” he said.

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We have a scenario of falling behind, or, in other words, we are falling behind.

Ćorić said productivity could not be separated from technological development. The world is already living through a revolution based on artificial intelligence and the full digitalization of business processes, particularly in manufacturing and industry, he said. Croatia and the European Union lag in research and development investment, but he sees potential in sectors and companies that already achieve high productivity. “What sets us apart from the rest of Europe are some pockets of productivity that I believe can definitely be used much better,” he said.

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What sets us apart from the rest of Europe are some pockets of productivity that I believe can definitely be used much better.