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At that time the COVID-19 pandemic halted the operations of almost one in five companies, notably those affected the most by social distancing, as a result of which their revenues in the first month of quarantine dropped over 90%.

Due to the latent danger of the reactivation of the same or similar viruses, companies whose business requires close contact with clients will have to restructure their business models, the Croatian National Bank (HNB) says in an analysis.

Borrowing in 2019 was dominated by new loans for current assets and investment, but since the epidemic outbreak, there have been virtually no investment loans. In March, April, and June, between 85,000 and 100,000 legal entities with nearly 600,000 employees in total received HRK 6 billion in job-retention aid. Over 90% of those entities were micro-enterprises.

The aid helped them to survive and swiftly adapt their operations, the central bank says, warning that extending non-selective aid in the long term could keep companies with untenable business models on the market as well, slowing down the redirecting of funds to healthy companies expected to help with economic recovery.