Home > Country profiles > Economic and Political Outline
Croatia: Economic and Political Outline
Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline
Croatia should become the 28th member state of the EU in July 2013. In 2012, the Croatian economy, already oriented heavily towards Europe, remains nonetheless very dependent on the regional situation. Following the 2009 recession (-6% growth in 2009 and -1.2% in 2010), in 2011 its economy registered a slight increase in its GDP (0.5%).
The country had adopted measures to boost its economy ahead of the financial crisis and had injected liquidity into the domestic banking sector which was then used to better cope with the effects of the crisis. However, today, looking at the evolution of household debt (+0.6% in 2011) and business debt (+ 5.6% in 2011), there are few signs of sustainable recovery. The forecast for 2012 also suggests stagnation. The crisis has highlighted the limits of the Croatian model, based on household consumption. The key economic drivers in 2011 showed negative growth rates (Industry: -1.3%; construction: -7.3%). However, tourism revenues, which stabilized in 2010 after a decline of 6% in 2009 (EUR 6.5 billion), increased in 2011.
Croatia still needs to deal with a very high rate of unemployment, even though this rate has been decreasing (12.5% of the workforce in 2011, after 17.5% in 2010).
It seems that growth now depends on investment, on making use of the country's comparative advantages, on the rationalisation of deficitary public companites and on modernising the state administration. To face these challenges, the country will have to show a greater level of openness to direct foreign investment and work towards an improvement in the real wages/productivity ratio.
With its 4.4 milion inhabitants, whose average revenue corresponds to 65% of the EU average, as well as an influential diaspora, Croatia remains the second most developed economy of the Balkan region after Slovenia.
| Main Indicators | 2009 | 2010 | 2011 | 2012 (e) | 2013 (e) |
| GDP (billions USD) | 63.44 | 60.83 | 64.16 | 66.94 | 70.13 |
| GDP (Constant Prices, Annual % Change) | -6.0 | -1.2e | 0.8 | 1.8 | 2.5 |
| GDP per Capita (USD) | 14,324 | 13,776e | 14,529 | 15,157 | 15,880 |
| General Government Gross Debt (in % of GDP) | 34.5 | 40.6 | 47.5e | 50.0 | 51.9 |
| Inflation Rate (%) | 2.4 | 1.0e | 3.2e | 2.4 | 2.2 |
| Unemployment Rate (% of the Labor Force) | 9.1 | 12.2 | 12.7 | 12.2 | 11.7 |
| Current Account (billions USD) | -3.29 | -0.67 | -1.18e | -1.81 | -2.29 |
| Current Account (in % of GDP) | -5.2 | -1.1e | -1.8e | -3.3 | - |
Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data
Note: (e) Estimated Data
The agricultural sector only represents 5% of the country's GDP. Croatia mainly produces wheat, corn, sugar beet, fruits, wine and olive oil.
The secondary sector represents 22% of the GDP. The Croatian industry is concentrated in competitive activities: textiles, wood, the steel industry, aluminum and the food industry. With more than one-third of the territory covered with forests, the wood industry is one of the fundamental sectors of the economy. The country has limited mineral resources. The manufacturing industry employs 80% of the total workforce.
The service sector represents 73% of the GDP. The tourism sector is in full bloom. As a fact, Croatia receives almost 10 million visitors every year and its growth will be confirmed in the next following years with the development of even more modern infrastructures to welcome foreign tourists.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 13.9 | 28.9 | 57.0 |
| Value Added (in % of GDP) | 7.2 | 29.5 | 63.3 |
| Value Added (Annual % Change) | 0.1 | -2.4 | -1.2 |
Source: World Bank - Last Available Data.
Find more information about your business sector on our service Market reports search.
| Monetary Indicators | 2006 | 2007 | 2008 | 2009 | 2010 |
| Croatian Kuna (HRK) - Average Annual Exchange Rate For 1 USD | 5.84 | 5.36 | 4.94 | 5.28 | 5.50 |
Source: World Bank - Last Available Data.
Find out all the exchange rates daily on our service Currency convertor.
Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation
Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
See the Country Risk Analysis Provided By Ducroire.
Croatia joined the WTO in 2000 and has also signed an Agreement of Association with the European Union in 2005, signed the EU adhesion treatey on December 9, 2011. Its economy depends heavily on foreign trade. The foreign trade's contribution to the GDP was of more than 100% in 2011. Exports, which rose sharply in 2010 (+18%), namely in the petrochemical and marine construction sectors, dried up due to the slowdown of the eurozone economies. This fact illustrate the heavy dependency of Croatia on the economic situation of the entire continent.
Croatia's main suppliers are Italy, Germany, Russia, China, Slovenia, Austria, Hungary and France. Fuels, equipment, cars and machinery are significant import items.
Croatia mainly exports mineral fuels, ships, boats, electric & mechanical machinery, equipment, wood and wooden articles. Its main clients are Italy, Bosnia-Herzegovina, Germany, SLovenia, but also Austria, Serbia, Great Britain, the USA, Malta and France.
The Croatian trade balance is regularly in deficit and with the effects of the crisis, this deficit became deeper due to the fall in exports. The revenues related to tourism, which were also low, did help to compensate a little the global deficit. The most promising sectors are tourism, construction, telecommunications, and retail sales.
| Foreign Trade Indicators | 2007 | 2008 | 2009 | 2010 | 2011 |
| Imports of Goods (million USD) | 25,839 | 30,728 | 21,203 | 20,054 | 20,397 |
| Exports of Goods (million USD) | 12,364 | 14,112 | 10,474 | 11,807 | 12,289 |
| Imports of Services (million USD) | 3,842 | 4,506 | 3,791 | 3,438 | 3,400 |
| Exports of Services (million USD) | 12,470 | 14,760 | 11,725 | 11,263 | 12,756 |
| Imports of Goods and Services (Annual % Change) | 6.2 | 3.6 | -20.7 | -1.9 | - |
| Exports of Goods and Services (Annual % Change) | 3.7 | 1.7 | -16.2 | 6.3 | - |
| Imports of Goods and Services (in % of GDP) | 49.8 | 49.9 | 39.2 | 40.4 | - |
| Exports of Goods and Services (in % of GDP) | 42.1 | 41.6 | 35.9 | 38.6 | - |
| Trade Balance (million USD) | -12,933 | -15,956 | -10,290 | -7,877 | - |
| Trade Balance (Including Service) (million USD) | -4,235 | -5,213 | -2,143 | -309 | - |
| Foreign Trade (in % of GDP) | 91.9 | 91.4 | 75.0 | 79.0 | - |
Source: WTO - World Trade Organization ; World Bank , Last Available Data
| Main Customers (% of Exports) |
2011 |
| Italy | 15.7% |
| Bosnia and Herzegovina | 12.1% |
| Germany | 9.9% |
| Slovenia | 8.1% |
| Austria | 5.6% |
| See More Countries | 48.5% |
| Main Suppliers (% of Imports) |
2011 |
| Italy | 16.4% |
| Germany | 12.6% |
| Russia | 7.8% |
| China | 7.1% |
| Slovenia | 6.3% |
| See More Countries | 49.8% |
Source: Comtrade, Last Available Data
Source: Comtrade, Last Available Data
To go further, check out our service Import-Export flows.
Source: Worldwide Press Freedom Index 2011, Reporters Without Borders
Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
Note: The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Any Comments About This Content? Report It to Us.
© Export Entreprises SA, All Rights Reserved.
Last Updates: May 2012