ZAGREB – 95% of companies suffering due to COVID-19

A survey by the Croatian Chamber of Commerce (HGK) covering more than 2,700 companies showed that 95% of companies had reported declines in turnover and that 28% had suffered declines of up to 100%, due to the COVID-19 outbreak, state news agency HINA reported.

The tax administration received about 2,000 applications for tax deferral on the day the government put this measure in place, and about 14,000 businesses applied to the Labour and Pension System to provide the minimum wage for 71,000 workers. Coronavirus will be a ”very strong blow to the economy’’, the Minister of Finance Zdravko Maric said.

While 45% of the companies had recorded declines in exports and 41% reported falls in imports, two-thirds of companies currently have no problem with labour shortages. Yet, 27% of the companies are facing problems caused by sick leave and self-isolation.

Most of them showed an interest in the deferral of payments of taxes and contributions (56%) and in aid aimed at preserving jobs (50%), while 35% of the companies were interested in new loans for liquidity and 32% welcomed the move to introduce a moratorium on the repayment of the existing loans.

The greatest interest in the latest government measures was from companies in the manufacturing industry, services, retail, transport, construction and tourism. 

The two measures, prompted by the coronavirus pandemic, will require at least 5 billion kuna (€65m) for the next three months and this amount was not provided for in the present budget. “But we will secure it,” Maric said in an interview with the public broadcaster HRT, adding that reimbursements would start on Thursday.

He said that the coronavirus will deal a ”very strong blow to economy”, but that since it is unclear how long it will last, the government will be adjusting ”measures and introducing new ones accordingly,” the finance minister said.  Analysts are particularly worried about the impact on tourism, Croatia’s flagship industry, which generates almost 20% of the GDP. (Karla Junicic, EURACTIV.hr)

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