Croatia: Economy Overview

Croatia has high foreign debt, anemic export sector, strained state budget, and over-reliance on tourism revenue, which will result in higher risk to economic stability over the medium term.

Economy Overview

Once one of the wealthiest of the Yugoslav republics, Croatia's economy suffered badly during the 1991-95 war as output collapsed and the country missed the early waves of investment in Central and Eastern Europe that followed the fall of the Berlin Wall. Between 2000 and 2007, however, Croatia's economic fortunes began to improve slowly, with moderate but steady GDP growth between 4% and 6% led by a rebound in tourism and credit-driven consumer spending. Inflation over the same period has remained tame and the currency, the kuna, stable. Nevertheless, difficult problems still remain, including a stubbornly high unemployment rate, a growing trade deficit and uneven regional development. The state retains a large role in the economy, as privatization efforts often meet stiff public and political resistance. While macroeconomic stabilization has largely been achieved, structural reforms lag because of deep resistance on the part of the public and lack of strong support from politicians. The EU accession process should accelerate fiscal and structural reform. While long term growth prospects for the economy remain strong, Croatia will face significant pressure as a result of the global financial crisis.

GDP (purchasing power parity):

$82.58 billion (2008 est.)
country comparison to the world: 73
$80.65 billion (2007 est.)
$76.44 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate):

$69.36 billion (2008 est.)

GDP - real growth rate:

2.4% (2008 est.)
country comparison to the world: 146
5.5% (2007 est.)
4.7% (2006 est.)

GDP - per capita (PPP):

$18,400 (2008 est.)
country comparison to the world: 67
$17,900 (2007 est.)
$17,000 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector:

agriculture: 6%
industry: 27.7%
services: 66.3% (2008 est.)

Labor force:

1,731 million (2008 est.)
country comparison to the world: 123

Labor force - by occupation:

agriculture: 5%
industry: 31.3%
services: 63.6% (2007 est.)

Unemployment rate:

13.7% (2008 est.)
country comparison to the world: 147
11.8% (2007 est.)

Investment (gross fixed):

31.1% of GDP (2008 est.)
country comparison to the world: 21

Budget:

revenues: $26.86 billion
expenditures: $28.54 billion (2008 est.)

Inflation rate (consumer prices):

6.1% (2008 est.)
country comparison to the world: 102
4.5% (2007 est.)

Commercial bank prime lending rate:

10.07% (31 December 2008)

Stock of domestic credit:

$49.79 billion (31 December 2008)
country comparison to the world: 48
$45.7 billion (31 December 2007)

Agriculture - products:

wheat, corn, sugar beets, sunflower seed, barley, alfalfa, clover, olives, citrus, grapes, soybeans, potatoes; livestock, dairy products

Industries:

chemicals and plastics, machine tools, fabricated metal, electronics, pig iron and rolled steel products, aluminum, paper, wood products, construction materials, textiles, shipbuilding, petroleum and petroleum refining, food and beverages, tourism

Industrial production growth rate:

1.7% (2008 est.)
country comparison to the world: 112

Oil - production:

22,200 bbl/day (2007 est.)
country comparison to the world: 73

Natural gas - production:

1,58 billion cu m (2007 est.)
country comparison to the world: 59

Current account balance:

$-6.397 billion (2007 est.)
country comparison to the world: 162
$-4.447 billion (2007 est.)

Exports:

$14.36 billion (2008 est.)
country comparison to the world: 78
$12.62 billion (2007 est.)

Exports - commodities:

transport equipment, machinery, textiles, chemicals, foodstuffs, fuels

Exports - partners:

Italy 18.9%, Bosnia and Herzegovina 15.3%, Germany 10.7%, Slovenia 7.7%, Austria 5.7% (2008)

Imports:

$30.42 billion (2008 est.)
country comparison to the world: 63
$25.56 billion (2007 est.)

Imports - commodities:

machinery, transport and electrical equipment, chemicals, fuels and lubricants; foodstuffs

Imports - partners:

Italy 17.1%, Germany 13.4%, Russia 10.5%, China 6.1%, Slovenia 5.6%, Austria 4.9% (2008)

Debt - external:

$54.79 billion (31 December 2008)
country comparison to the world: 50
$48.93 billion (31 December 2007)

Stock of direct foreign investment - at home:

$27.17 billion (31 December 2008 est.)
country comparison to the world: 60
$23.17 billion (31 December 2007 est.)

Stock of direct foreign investment - abroad:

$3.343 billion (2008 est.)
country comparison to the world: 61
$3.124 billion (31 December 2007 est.)

Exchange rates:

kuna (HRK) per US dollar - 4.98 (2008 est.), 5.3735 (2007), 5.8625 (2006), 5.9473 (2005), 6.0358 (2004)

note: the krooni is pegged to the euro

Source: CIA - The World Factbook