PwC Croatia CEO John Gasparac
(PwC Croatia CEO John Gasparac)

Croatian CEOs confident in company growth


Croatian CEOs report high optimism about the world economy, with 67% believing growth will improve in 2021, according to a survey of PwC Croatia. Their optimism extends to their own company’s performance: 84% expect that their organization’s revenue will increase over the next year while 71% expects higher profitability as well.

While only 29% of Croatian CEOs increased headcount in past 12 months, 65% expects an increase in the number of employees this year. With exception of US, Croatian CEOs are predominantly relying on European countries to fuel growth in next 12 months.

“We believe that the improvement of global economic growth could be up to 5% which could happen in the last quarter of 2021 and the first quarter of 2022, when there could be an overall recovery of the indicators to the pre-pandemic levels. Based on the global expectations and the structure of the Croatian GDP, an economic growth of 3% has been forecast for Croatia by the end of this year,” PwC Croatia CEO John Gasparac stated.

A total of 31 Croatian CEOs from the service and manufacturing sectors took part in the survey held in January and February of 2021. The main message of the survey is business optimism for the coming period, which is in line with the results of PWC’s poll of CEOs around the world, Gasparac added.

Croatia Annual GDP growth rate
(Source: Croatian Bureau of Statistics)

A total of 13% of the Croatian CEOs participated in this year’s survey were female. Only 23% have been performing the current CEO role for less then 5 years, while 39% for more than 11 years. On the global level, the opposite trend is recorded – 52% of the interviewed CEOs have been performing the current role less than 5 years.

As a result of the Covid-19 crisis, 81% of CEOs in Croatia plan to increase investments in digital transformation in the long run, while 42% plan to increase their rate of investment in digital transformation by 10% or more. However, only 10% Croatian CEOs aims to significantly increase investments into sustainability and ESG Environmental initiatives.

Meanwhile, Croatian CEOs are less concerned than their global peers about cyber threats, with 68% saying they’re somewhat or extremely concerned (compared to 85% globally), according to the survey.

A total of 61% of the Croatian CEOs selected availability of key skills as the threat to their business that has been factored into their strategic risk management activities. 58% of the CEOs think that a skilled, educated and adaptable workforce should be one of the government’s priorities in their country.

Effective tax system should be most important government priority according to 71% Croatian CEOs. Although, only 25% of Croatian CEOs believes that tax policy changes will increase their organization’s total tax obligation (49% in the SEE).

Croatia’s economy shrank 0.7% year-on-year in the first quarter of 2021, following an upwardly revised 7.2% decline in the previous period, partly due to a partial lockdown. Still, it was the smallest economic contraction since the onset of the coronavirus crisis in 2020. The Croatian government expects growth of 5.2% in 2021, after an 8.4% in 2020. The World Bank expects the country’s gross domestic product (GDP) to grow by a real 5.5% this year.