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(E) Salaries Growing in Croatia
By Nenad N. Bach | Published  01/7/2005 | Business | Unrated
(E) Salaries Growing in Croatia


Salaries Growing in Croatia

A significant growth in salaries has been registered in Croatia, although it remains to be seen how the IMF will react to this.

By Miranda Novak for Southeast European Times in Zagreb – 30/09/04

The healthcare sector is one of the highest paid in Croatia. [AFP]

The average monthly salary in Croatia for September was 434 euros, representing a 12 per cent increase from what it was a year ago. Real growth -- growth adjusted for a rise in the cost of living -- amounted to 5.1 per cent, the Croatian Treasury Department (ZAP) announced in its latest bulletin.

There are still pronounced differences in average salaries between particular sectors of the economy. The highest average salary in September was registered in the financial sector at 619 euros -- 42.6 per cent above the country's average. Those employed in public administration also received an annual income above average. Other salaries above average are in the defence forces and in mandatory social security, followed by healthcare and social protection, the electrical utility, waterworks and natural gas, transportation and warehousing, mining, agriculture, hunting and forestry, education and other social sectors.

Salaries below the average for the republic were registered in fishing, construction, commerce, the hotel and restaurant industry, the processing industry and the real-estate business. In these sectors, the average salary was below the average by between 6.8 per cent and 39.6 per cent. The lowest salary was registered in the fisheries sector at 262 euros.

Salaries in the private sector continue to be lower than in the public sector. The average salary in the private sector for September amounted to 380 euros, which is 23.3 per cent below the average salary in the public sector, and 12.3 per cent below the average in the country. The average salary in September for the public sector amounted to 496 euros, which is 11.4 per cent above the state average, the ZAP report said.

The total net salary for Croatia in the first nine months of this year reached 3.4 billion euros, according to ZAP. This is a nominal increase of 8.4 per cent from last year, while real growth was 4.7 per cent. In only two sectors out of 13, the net expenditure on salaries in the first nine months of this year was lower compared to last year. These sectors are construction, where total expenditure on salaries was lower by 5.1 per cent, and fisheries, where a 5.3 per cent decrease was registered, ZAP reports.

Even though the decision on a minimum salary of 225 euros has been in force since 1 April, certain employers continue to pay salaries below that. According to ZAP data, 1,036 such cases were registered in Croatia in September.

Still unclear is how the IMF will react to the growth in public sector salaries. The government says its objective is to reach a stand-by or credit arrangement with the IMF. A stand-by agreement worth $250m was announced for the end of the year, but it appears that this will be pushed to the first half of next year.

The IMF has insisted the "freezing" of salaries in the public sector is one of the most pressing issues, given that the greatest portion of the state budget goes to salaries. 

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