Outlook For Croatia Remains Difficult
We remain downbeat about the Croatian economy, continuing to predict a sixth consecutive year of recession in 2014. While the rest of the EU economies are recovering Croatia is one of only two (the other is Cyprus) expected to see negative growth. The problem is weak household spending compounded by a lack of structural reforms. Croatia needs to increase labour market flexibility, reduce government bureaucracy and improve export competitiveness, or foreign investment and exports will remain anaemic. Unemployment remains high (nearly 20%), as are consumer debt levels. Public sector workers have been hit by wage and job cuts as part of the government's fiscal tightening. Uncertainty has also weakened investment flows. Net exports are having a marginally positive impact, but are outweighed by these other negative factors. As a result we have further reduced our GDP growth forecast to -0.7% this year (down from -0.3% in our last quarterly report). In 2015, we expect a weak return to growth with +0.6%.
Looking at the ports and shipping sector, we believe annual bulk cargo percentage growth will remain in the low single digits, although with GDP contracting, there are downside risks to this. More seriously perhaps, in the light of new data releases and signs of sharpening competition, we have reduced our predictions for box traffic this year at Rijeka quite drastically. We still believe the port has an important future role to play as a regional gateway, but question whether the current capacity expansion plans are running too far ahead of demand.
Headline Industry Data
In 2014, port of Rijeka tonnage volume will rise by 1.1% to 8.8mn tonnes, after 1.9% growth in 2013. Over the medium term to 2018, we project average annual growth of 1.4%.
2014 port of Rijeka container throughput forecast to grow 1.3% to 132,703 twenty-foot equivalent units (TEUs). Over the medium term, we project a good average annual increase of 5.5%,...
The Croatia Shipping Report has been researched at source and features latest-available data and Business Monitor International (BMI)'s independent forecasting, critically analysing international transport of dry bulk and containers. The report evaluates the global commodities and trade backdrop, alongside in-depth country-specific analysis of trade prospects. The report also contains company profiles covering leading multinational and national shipping companies and analysis of latest industry news, trends and regulatory developments in Croatia.
BMI's Croatia Shipping Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the shipping industry in Croatia.
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BMI Industry View
Summary of BMI's key industry forecasts, views and trend analysis covering shipping, major investments and projects and significant multinational and national company developments.
SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis of the state's shipping sector, which carefully evaluates the short- and medium-term issues facing the industry.
Analysis of the capacity, terminals and planned development of the major ports in each country, including data on throughput and total tonnage.
Industry Forecast Scenario
Historic data series (2008-2012) and forecasts to end-2018 for all key industry and macroeconomic indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast, including:
Major port freight throughput (tonnes/teu); overall freight throughput (teu); total imports (US$bn) and exports (US$bn).
Company profiles include business activities, leading products and services, company strategy, trends and developments and economic performance analysis.