Croatia: country overview

Croatia is an acceeding country. The EU and Croatian leaders signed Croatia's EU Accession Treaty on 9 December 2011. Subject to ratification of the Treaty by all the Member States and Croatia, Croatia will become the EU's 28th Member State on 1 July 2013.

Political system: Presidential/parliamentary democracy

Capital city: Zagreb

Total area: 56 594 km²

Population: 4.48 million

Currency: kuna

Official language: Croatian

Country overview

Croatia became an independent state in 1991 as part of the break-up of former Yugoslavia. The Zagorje region, north of the capital Zagreb, is a land of rolling hills, while the fertile agricultural region of the Pannonian Plain is bordered by the Drava, Danube, and Sava rivers in the east. Over one third of Croatia is forested.The Croatian Parliament (the Sabor) is a single-chamber legislative body made up of 160 members elected by popular vote to serve four-year terms. Croatia has an economy based mainly on light industry and services. Tourism is a notable source of income. The best known feature of Croatia is the Dalmatian coast with its hundreds of islands and the historic cities of Dubrovnik, Split and Zadar. Six World Heritage sites and eight national parks bear witness to Croatia’s immense cultural wealth. The richness of Croatia’s culture reflects in its sometimes turbulent history first as part of the Roman empire and then as a frontier region on the border between the Austro-Hungarian and Ottoman empires.

Economy Overview

Though still one of the wealthiest of the former Yugoslav republics, Croatia's economy suffered badly during the 1991-95 war. The country''s output during that time collapsed and Croatia 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 remained tame and the currency, the kuna, stable. Croatia experienced an abrupt slowdown in the economy in 2008 and has yet to recover. Difficult problems still remain, including a stubbornly high unemployment rate, a growing trade deficit, uneven regional development, and a challenging investment climate. The new government has announced a more flexible approach to privatization, including the sale in the coming years of state-owned businesses that are not of strategic importance. While macroeconomic stabilization has largely been achieved, structural reforms lag. Croatia will face significant pressure as a result of the global financial crisis, due to reduced exports and capital inflows. The World Bank expects Croatia to enter a recession in 2012 and has urged the new government to cut spending, particularly on social programs. Croatia''s high foreign debt, anemic export sector, strained state budget, and over-reliance on tourism revenue will result in higher risk to economic progress over the medium term.

Source: Europa, The World Factbook