As highlighted by the SEFEE renewables scoreboard, Croatia and Romania have both made significant progress in renewable energy. Today, both countries produce more net electricity from renewables and biofuels than the European Union average. As of February, both countries hit as high as 50% market share, higher than the EU’s 47% average. Meanwhile, Croatia's economic indicators reveal a slowdown in real wage growth to 9.2% in January, while the unemployment rate remained stable at 5.4% in February.
Renewable Energy Milestones
In the broader region, Croatia and Romania are exceptions for their dedication to renewable energy. They are now leading the EU average for renewables and biofuels combined in net electricity generation. Reaching this milestone is an important step toward their sustainable energy targets. That feat makes them the exception among EU countries. It is an indication of how serious they are about cutting carbon emissions and moving the nation to cleaner energy.
Czechia exhibits the lowest share of renewables in net electricity generation in the EU. The country depends on nuclear power, producing greater than 40% of its energy through nuclear. This dependency is quite analogous to that of Hungary. Slovakia is the second most nuclear-dependent country in the world, getting more than 60% of its electricity from nuclear. This aligns Slovakia more closely with the French energy strategy.
Economic Developments in Croatia and Slovakia
While the transition to renewable energy has been moving forward, Croatia is still struggling in many areas of their economy. Real wage growth had decelerated to just 9.2% in January, an alarming sign of a rapid deceleration in the growth of purchasing power for Croatian workers. Despite this positive news, February saw the unemployment rate holding steady at 5.4%, a little too soon to be seeing a turnaround in the labor market. Moreover, producer prices fell by -1.9% y-o-y in February, which is an indication of possible deflationary pressures.
Slovakia’s economic indicators tell a contrary, muddled tale. Employment fell -0.9% yo-yo, as the nominal wage growth rate decelerated to 7.9%. The unemployment rate remained at 4.9% in February. Amid these economic fluctuations, Slovak Prime Minister Robert Fico managed to restore his parliamentary majority, potentially resolving a political impasse that had persisted for several months.
Currency Movements and Broader Implications
In the EUR/USD pair, the common currency is suffering minor losses, moving deeper towards 1.0800 in Friday’s European session. This movement is partly a willingness to reflect the broader economic uncertainties and market reaction to recent developments across the region.
The economic and energy shifts in these countries echo a sentiment expressed by economist John Maynard Keynes:
“It should not be a matter of tearing up roots but of slowly training a plant to grow in a different direction.”
This perspective underscores the gradual yet essential transition towards renewable energy and economic adjustments required in today's rapidly changing global landscape.