CROATIA


The Land of unique beauty, ancient history and rich cultural heritage

Total area: 87,661 sq km
Population: 4.28 million
Government type: Parliamentary democracy
Administrative division: 20 counties called “zupanija”
Capital + other major cities: Zagreb (790,00) + Split (178,000), Rijeka (129,000), Osijek (108,000)
Currency: Kuna (HRK)
Languages: Croatian (official) 95.6%, Serbian 1.2%, other 3%
Ethnicity: Croat 90.4%, Serb 4.4%, other 4.4%
Religion: Roman Catholic 86.3%, Orthodox 4.4%, Muslim 1.5%, other 1.5%, unspecified 2.5%, not religious or atheist 3.8%
President: (Mr.) Kolinda GRABAR-KITAROVIC (since 19 February 2015))
Prime Minister:(Mr.) Tihomir ORESKOVIC (since 16 June 2016)
Date of EU accession: 1 July 2013
mapa


KEY FEATURES

  • Tourism dominates the Croatian service sector and accounts for up to 20% of Croatian GDP
  • Newest EU member
  • Service-based economy – 70% of GDP
  • Shipbuilding is a mainstay of manufacturing

Croatia, a country with Mediterranean cultural and social environment and traditions, with an average annual GDP growth rate of 4.4% prior to the global crisis, has been one of the best performing transitional economies in this part of Europe.

General political and economic stability, an efficient legal system and free enterprise within a democratic environment were the basic preconditions for economic development which eventually propelled Croatia towards full EU membership (as of July in 2013).


MACROECONOMIC OVERVIEW

Croatia was one of the region's countries worst hit by the global crisis of 2008-09 and has struggled towards recovery ever since. Between 2008 and 2014, GDP shrunk by more than 12 % in real terms and unemployment surged from below 9 % to more than 17 %. The situation started to improve at the end of 2014, and in the course of 2015 real GDP growth surpassed expectations. In 2015, Croatia finally came out of its six years-long recession.

Croatia still suffers from high unemployment, large foreign debt (external debt roughly reaching the same size as its economy) and structural problems. The state retains a strong role in the economy. The country needs to continue with restructuring of the public sector and privatisation of state industries; however, such efforts are hampered by stiff public and political resistance.

The industrial sector is responsible for 25 percent of Croatia's GDP, with agriculture, forestry, and fishing accounting for the remaining 5 percent. About half of Croatia’s trade is with the “Euro-area” – countries that use the Euro – the source of about three-fourths of foreign direct investment (FDI) flows into the country. The EU market represents more than 60 percent of Croatia’s total exports. In the manufacturing sector, Croatia primarily exports low and medium-low technology. There are about 140,000 registered small and medium size enterprises (SMEs) in the country. The SME sector represents 67.2 percent of total employment, and 39 percent of Croatian SMEs are active in the service sectors


Selected economic indicators, Croatia, 2010 - 2016

    2010 2011 2012 2013 2014 2015 2016*
GDP
Real GDP growth
%
-1.7
-0.3
-2.2
-1.1
-0.4
1.6
1.8
GDP at current prices
€ bn
44.42
44.19
43.48
43.56
43.02
43.90
Foreign trade
Exports
€ bn
17.66
18.71
19.00
18.66
19.91
21.68
Imports
€ bn
17.86
18.92
18.80
18.31
19.03
20.47
Balance
€ bn
-0.20
0.03
0.20
0.35
0.88
1.20
Prices
CPI - average inflation rate
%
1.0
2.3
3.4
2.2
0.2
-0.3
-0.6
PPI - industry - average
%
-
7.0
5.4
-0.2
-2.5
-3.5
Employment
Registered unemployment
%
12.1
13.6
16.1
16.5
17.1
16.3
15.5
Average monthly gross wage
1,053
1,048
1,047
1,047
-
-7
Exchange rates
HRK/USD average
5.50
5.34
5.85
5.71
5.75
6.86
Currency board fixed rate: HRK/EUR
7.29
7.44
7.52
7.58
7.63
7.61
*data for 2016 - forecast
Source: Croatian Bureau of Statistics, Eurostat, IMF, 2016



KEY SECTORS

Services account for about two-thirds of Croatian GDP. Major industries include shipbuilding, construction, petrochemicals, and food processing. Most important of all is the tourism industry, with about 10 million foreign visitors per year and accounting for 20% of GDP. Croatia carries out almost two-thirds of its trade with EU partners (primarily with Italy, Germany, Slovenia and Austria).

In terms of value added, the leading sectors include the manufacture of food and beverages; electricity, gas and water supply; manufacture of chemicals and chemical products; refined petroleum products; and fabricated metal.

Production of food, beverages and tobacco accounts for 24% of GDP generated by the manufacturing industry, and employs the highest number of people.

The industrial sector with exports of over €1 billion annually is dominated by shipbuilding which accounts for over 10% of exported goods. Food processing and chemical industry also account for significant portions of industrial output and exports. Industrial sector represents 27% of Croatia’s total economic output while agriculture represents 6%. Industrial sector is responsible for 25% of Croatia's GDP, with agriculture, forestry and fishing accounting for the remaining 5% of Croatian GDP.
Croatia belongs to the leading tourist destinations in the Mediterranean region.


FOREIGN DIRECT INVESTMENT (FDI)

Following the prolonged recession that started with the global financial crisis in 2008, FDI in Croatia surged 2014 following EU accession in summer 2013, bringing a total of almost 2.9 billion euro of investment into Croatia.


EXPORTS & IMPORTS


2015 export and import data:




Main import partners:
Germany - 15.5%
Italy - 13.2%
Slovenia - 10.7%
Austria - 9.1%
Hungary - 7.8%


Main export partners:
Italy - 13.4%
Slovenia - 12.3%
Germany - 11.3%%
Bosnia Herzegovina - 9.8%
Austria - 6.5%


Croatia external trade - 2015




See references for our track record in Croatia.



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