Economy of Croatia
|Economy of Croatia|
|Currency||Croatian kuna (HRK)|
|GDP||$57.283 billion (Nominal) 2013
$77.9 billion (PPP) 2013
|GDP rank||73rd (nominal) / 82nd (PPP)|
|-0.5% (Real, Q3 2014) |
GDP per capita
$13,561 (Nominal, 2013)$20,904 (PPP, 2013)
GDP by sector
|agriculture: 4.7%; industry: 33.1; services: 62.2% (2012 est.)|
GDP by component
|Private consumption (52.3%)
Public consumption (18.7%)
Import (54.2%) (2007)
|0.2% (2014 Sep) |
Population below poverty line
|1.677,819 million (2013 )|
Labour force by occupation
|agriculture: 2.1%; industry: 29.0%; services: 69.0% (2012)|
|Unemployment||17.7% (September 2014) |
Average gross salary
|8,024 HRK / 1,460 $, monthly (July 2014)|
|5,558 HRK / 1010 $, monthly (July 2014)|
|chemicals and plastics, machine tools, fabricated metal, electronics, pig iron and rolled steel products, aluminium, paper, wood products, construction materials, textiles, shipbuilding, petroleum and petroleum refining, food and beverages, tourism|
|Exports||$12.74 billion (86.th), (2013 est.)|
|transport equipment, machinery, textiles, chemicals, foodstuffs, fuels|
Main export partners
| Italy 14.9%
Bosnia and Herzegovina 13.2%
Austria 6.8% (2012 est.)
|Imports||$21.93 billion (2013 est.)|
|machinery, transport and electrical equipment; chemicals, fuels and lubricants; foodstuffs|
Main import partners
| Italy 16.7%
Austria 4.5% (2012 est.)
|$36.17 billion (As of Q2 2014)|
Gross external debt
|249.8 billion HRK , $ 41.17 USD aprx. (Q2 2014)|
75.7% (September 2014) of GDP . Expected rising to 81.8 % of GDP by end of 2014.
|Revenues||$20.12 billion (2014 Budget)|
|Expenses||$2 billion (2014 Budget)|
|Economic aid||EUR179.5 million (0.12% of GNI) (2007)|
BBB+ (T&C Assessment)
(Standard & Poor's)
|US $ 16.37 billion (August 2014)|
Economy of Croatia is a service-based economy with the tertiary sector accounting for 70% of total gross domestic product (GDP). Croatian economy was badly affected by the Global Financial Crisis, and contracted by 6.9% in 2009, 1.4% in 2010, then showed signs of recovery in 2011 with 0.0% real GDP growth, but contracted again in 2012 by 1.8%. Before the global financial crisis of 2008-09, the Croatian economy grew at a healthy 4-5% annually, incomes doubled, and economic and social opportunities dramatically improved. The prolonged crisis is testing this progress, as well as Croatia’s aspirations, as the country is now entering its sixth year of recession, having lost over 12% of its output. Croatian GDP at peak was worth around 70 billion $ USD (2008) than the Global Financial Crisis came and the country is in recession since then. GDP is expected to recover in the end of 2015 (Q3,Q4) by 0.5%. To that point GDP is expected to fall and unemployment is expected to rise.
Croatia joined European Union on 1 July 2013, and in spite of the rather slow post-recession recovery, in terms of income per capita it is still ahead of some European Union member states such as Bulgaria, Romania, and Latvia. In terms of average monthly wage, Croatia is ahead of 9 EU members (Czech Republic, Estonia, Slovakia, Latvia, Poland, Hungary, Lithuania, Romania, and Bulgaria). With unemployment rate of 18.3% as of June 2014, Croatia has the third highest unemployment rate in the European Union, after Greece (27%), and Spain (26.8%).
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.
Croatian agricultural sector subsists from exports of blue water fish, which in recent years experienced a tremendous surge in demand, mainly from Japan and South Korea. Croatia is a notable producer of organic foods and much of it is exported to the European Union. Croatian wines, olive oil and lavender are particularly sought after.
Tourism is traditionally a notable source of income, particularly during the summer months, but also more recently during the winter months as well, due to an increase in popularity of snow sports such as skiing. With over 10 million foreign tourists annually, tourism generates revenue in excess of €7 billion. Croatia is ranked among the top 20 most popular tourist destinations in the world, and was voted world's top tourism destination in 2005 by Lonely Planet.
Trade plays a major role in Croatian economic output. In 2007 Croatia's exports were valued at USD 12.84 billion (24.7 billion including service exports). According to Healy Consultants, trade in Croatia is bolstered by its low trade-weighted average tariff of just 1.2%. Croatia has a stable market economy accompanied by a strong and stable currency, the Kuna.
Persistent economic problems still remain and include a rather high unemployment rate (17.5% in 2014), and the slow progress of necessary economic reforms. Of particular concern is the heavily backlogged judiciary system, combined with inefficient public administration, especially regarding the issues of land ownership and corruption in the public sector. Unemployment is regionally uneven: it is very high in eastern and southern parts of the country, nearing 20% in some areas, while relatively low in the north-west and in larger cities, where it is between 3 and 7%. Unemployment has been constantly declining by 5% over the last 7 years.
During the 19th century the Kingdom of Croatia had a high ratio of population working in agriculture. Many industrial branches developed in that time, like forestry and wood industry (stave fabrication, the production of potash, lumber mills, shipbuilding). The most profitable one was stave stave fabrication, the boom of which started in the 1820s with the clearing of the oak forests around Karlovac and Sisak and again in the 1850s with the marshy oak masses along the Sava and Drava rivers. Shipbuilding in Croatia played a huge role in the 1850s Austrian Empire, especially the longe-range sailing boats. Sisak and Vukovar were the centres of river-shipbuilding.
Slavonia was also mostly an agricultural land and it was known for its silk profuction. Agriculture and the breeding of cattle were the most profitable occupations of the inhabitants. It produced corn of all kinds, hemp, flax, tobacco, and great quantities of liquorice. The quantity of wine produced was also large, especially in the county of Srijem. In 1857 industrial employment (11,01%) was highest in the County of Osijek, while 72,3% were employed in agriculture (82,9% in the Požega County).
In an economy traditionally based on agriculture and raising of livestock, peasants accounted for more than half of Croatia's population until after World War II. Pre-1945 industrialization was slow and centered on textile mills, sawmills, brick yards and food-processing plants.
Rapid industrialization and diversification occurred after World War II. Decentralization came in 1965 and spurred growth of several sectors including the prosperous tourist industry. Profits gained through Croatia's industry were used to develop poor regions in other parts of former Yugoslavia, leading to Croatia contributing much more to the federal Yugoslav economy than it gained in return. This, coupled with austerity programs and hyperinflation in the 1980s, led to discontent in both Croatia and Slovenia which eventually fuelled political movements calling for independence. Foreign remittances contributed $2 billion annually to the economy by 1990.
Before the dissolution of Yugoslavia in 1991, SR Croatia was the second most prosperous and industrialized area (after SR Slovenia), with a per capita output more than one-third above Yugoslav average. Privatization under the new Croatian government had barely begun when war broke out in 1991. Economic infrastructure was directly affected by the Croatian War of Independence and sustained massive damage, particularly in 1991 and 1992.
||It has been suggested that Croatian privatization controversy be merged into this article. (Discuss) Proposed since January 2012.|
Croatia and Slovenia, the two westernmost republics in what was formerly SFR Yugoslavia, accounted for nearly half of the total Yugoslav GDP, and this was reflected in the overall standard of living which in Croatia's case was more than 50% above Yugoslav average, and close to 90% in Slovenia. Nevertheless, since the late 1980s, with the collapse of socialism and the beginning of economic transition, Croatian economy experienced difficulties due to deindustrialization, war destruction and the loss of Yugoslav and Comecon markets.
By the end of the 1990s, Croatia faced considerable economic problems stemming from:
- damage during the internecine fighting to bridges, factories, power lines, buildings, and houses;
- the large refugee and displaced population, both Croatian and Bosnian
- the disruption of economic ties; and
- mishandled privatization
Croatia, along with the remainder of the former Yugoslavia, experienced a serious depression. President Franjo Tuđman initiated the process of privatization and de-nationalization in Croatia. The new government's inefficient and slow legal system, combined with the wider context of the Croatian war of Independence, led to numerous cases of mishandled privatization efforts, collectively known as the Croatian privatization controversy. This, along with the sudden loss of access to former Yugoslav markets, led to mass bankruptcies, and swelled the ranks of the unemployed by thousands.
Inflation and unemployment rose sharply and the kuna fell, prompting the national bank to tighten its fiscal policy. A new banking law passed in December 1998 gave the central bank more control over Croatia's 53 commercial banks and Croatia became dependent on international debt to finance its deficit.
Successful value-added tax program, planned privatization of state controlled businesses, and a revised budget with a 7% cut in spending across that board also happened.
Western aid and investment, especially in the tourist and oil industries, is a significant factor in the further development of the economy. The government has been successful in reform efforts — partially macroeconomic stabilization policies — and it has normalized relations with its creditors.
In 1998 the government founded The Business Innovation Center of Croatia – BICRO, in order to implement technology development and innovation support programs, as an important paradigm of future development.
The recession that began at the end of 1998 continued through most of 1999, and GDP in 1999 was flat. Inflation remained in check and the kuna was stable. However, consumer demand was weak and industrial production decreased. Structural reform lagged and problems of payment arrears and a lack of banking supervision continued.
|Year||GDP Growth||Deficit/Suficit*||Debt to GDP|
|*Including capital revenues|
Years after war
|This section is outdated. (November 2010)|
The new government led by former communist leader Ivica Račan carried out a small number of structural reforms. With tourism as the main contributing factor the country emerged from recession in 2000 and fell into another one in 2002. Due to overall increase in stability, the economic rating of the country improved and interest rates dropped.
Unemployment reached a peak of around 22% in late 2002. It has been steadily declining after the new government HDZ took over the office, powered by growing industrial production and rising GDP, rather than only seasonal changes from tourism, until the global crisis of 2008. During this time, Croatia focused more on empowering the economy by taking loans from foreign resources. In 2003, the nation's economy would officially recover to the amount of GDP it had in 1990. Between the years 2003 and 2007, Croatia’s private-sector share of GDP increased from 60% to 70%
Most economic indicators remained positive in this period, except for the external debt. The Croatian National Bank had to take steps to curb further growth of indebtedness of local banks with foreign banks. The dollar debt figure is quite adversely affected by the EUR/USD ratio — over a third of the increase in debt since 2002 is due to currency value changes.
The Croatian economy is heavily interdependent on other principal economies of Europe, and any negative trends in these larger EU economies also have a negative impact on Croatia as they are its biggest trade partners. The country is a member of European Union.
Since the global crisis hit the country in 2009, the unemployment has been steadily rising, resulting in the loss of more than 100,000 jobs. While the unemployment was 9.6% in the late 2007, as of January 2014 it peaked at 22.4%. Gini coefficient is 0,32. As of September 2012, Fitch ratings agency unexpectedly improved Croatia's economic outlook from negative to stable, reafirming Croatia's current BBB rating.
Major commercial banks:
- Zagrebačka banka (owned by UniCredito from Italy)
- Privredna banka Zagreb (owned by Intesa Sanpaolo from Italy)
- Hrvatska poštanska banka
- Hypo-Alpe-Adria Bank (owned by Hypo-Alpe-Adria Bank from Austria)
- Raiffeisen Bank Austria (owned by Raiffeisen from Austria)
- Erste & Steiermärkische Bank (former Riječka banka, owned by Erste Bank from Austria)
- $21.75 billion (114.2 billion Kuna)2007 (official figure)
- projected for 2008 - 124.2 billion Kuna (24.85 billion USD)
- $22.8 billion, (119.2 billion Kuna) 2007(official figure)
- projected for 2008 - 128.7 billion Kuna (25.74 billion USD)
Expenditure for 2007:
- Education - 10.5 billion Kuna
- Health Care - 21.4 billion Kuna
- Welfare & labour - 38.4 billion Kuna
- Interior and Justice - 6.6 billion Kuna
- Defense - 4.7 billion Kuna
- Finance - 11.1 billion Kuna
- Agriculture - 3.3 billion Kuna
- Culture and Sport - 1.2 billion Kuna
- Other - 17.0 billion kuna
Expenditure for 2008 = projected:
- Education - 12.4 billion Kuna
- Health Care - 22.4 billion Kuna
- Welfare and labour - 41.3 billion Kuna
- Interior and Justice - 6.6 billion Kuna
- Defense - 5.45 billion Kuna
- Finance - 12.0 billion Kuna
- Agriculture - 3.6 billion Kuna
- Culture and Sport - 1.2 billion Kuna
- Other - 23.8 billion Kuna
From the CIA World Factbook 2012.
GDP: purchasing power parity - $79.14 billion (2012 est.)
GDP - real growth rate: -1.8% (2012 est.)
GDP - per capita: purchasing power parity - $18,100 (2012 est.)
GDP - composition by sector: agriculture: 4.7% industry: 33.1% services: 62.2% (2012 est.)
Labor force: 1.745 million (2012 est.)
Labor force - by occupation: agriculture 2.1%, industry 29%, services 69% (2012)
Unemployment rate: 20.4% (2012 est.)
Population below poverty line:
national absolute: 11% (2003)
Household income or consumption by percentage share:
lowest 10%: 3.3%
highest 10%: 27.5% (2008 est.)
Distribution of family income - Gini index: 29 (2001) 32 (2010)
Inflation rate (consumer prices): 4.7% (2012)
Investment (gross fixed): 18,4% of GDP (2012 est.)
revenues: $19.3 billion (2012 est.)
expenditures: $20.99 billion, (2012 est.)
Public debt: 52.1% of GDP (2012 est.)
Industries: chemicals and plastics, machine tools, fabricated metal, electronics, pig iron and rolled steel products, aluminium, paper, wood products, construction materials, textiles, shipbuilding, petroleum and petroleum refining, food and beverages; tourism
Industrial production growth rate: 5.2% (2007 est.) -5.3% (2012 est.)
Electricity - production: 11.99 billion kWh (2005)
Electricity - production by source:
fossil fuel: 33.6%
other: 0.4% (2001)
Electricity - consumption: 14.97 billion kW·h (2005)
Electricity - exports: 3.634 billion kW·h (2005)
Electricity - imports: 8.746 billion kW·h (2005)
Oil - production: 27,190 barrels per day (4,323 m3/d) (2005 est.)
Oil - consumption: 99,000 barrels per day (15,700 m3/d) (2004 est.)
Oil - proved reserves: 69.14 million barrels (10.992×106 m3) (1 January 2006)
Natural gas - production: 1.477 billion cubic metres (2005 est.)
Natural gas - consumption: 2.58 billion cubic metres (2005 est.)
Natural gas - exports: 0 cubic metres (2005 est.)
Natural gas - imports: 1.103 billion cubic metres (2005 est.)
Natural gas - proved reserves: 27.16 billion cubic metres (1 January 2006)
Current account balance: −$4.385 billion (2007 est.)
Exports: $12.02 billion f.o.b. (2007 est.)
Imports: $26.54 billion f.o.b. (2007 est.)
Imports - commodities: machinery, transport and electrical equipment, chemicals, fuels and lubricants, foodstuffs
Imports - partners: Italy 16.7%, Germany 14.5%, Russia 9.7%, Slovenia 6.8%, Austria 5.4%, China 5.3%, (2006)
Reserves of foreign exchange and gold: $13.67 billion (31 December 2007 est.)
Debt - external: $45.29 billion (30 June 2007 est.)
Economic aid - recipient: ODA $125.4 million (2005)
Currency: kuna (HRK)
Exchange rates: kuna per US$1 – 5.7089 (2013), 5.3735 (2007), 5.8625 (2006), 5.9473 (2005), 6.0358 (2004), 6.7035 (2003), 7.8687 (2002), 8.34 (2001), 8.2766 (2000), 7.112 (1999), 6.362 (1998), 6.157 (1997), 5.434 (1996), 5.230 (1995)
Gross Domestic Product
|Counties of Croatia by GDP, in million Euro|
|City of Zagreb||6,632||7,537||8,205||8,991||9,927||11,138||12,208||13,176||14,622||14,079|
|Source: Croatian Bureau of Statistics|
|Counties of Croatia by GDP per capita, in Euro|
|City of Zagreb||8,532||9,674||10,529||11,527||12,701||14,216||15,567||16,766||18,554||17,814|
|Source: Croatian Bureau of Statistics|
- "GDP per capita, PPP (current international $) - Croatia".
- Average Net Earnings from Croatian Bureau of Statistics
- "Doing Business in Croatia 2012". World Bank. Retrieved 2011-11-21.
- "Exports Partners of Croatia". CIA World Factbook. 2012. Retrieved 2013-07-24.
- "Import Partners of Croatia". CIA World Factbook. 2012. Retrieved 2013-07-24.
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- Per capita GDP
- List of countries in Europe by monthly average wage
- Top Destinations for 2005
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- Ekonomski Indikatori
- stat inf 78 do 117.cdr
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- "Gross domestic product for Republic of Croatia, statistical regions at level 2 and counties, 2009". Priopćenje DZS (Zagreb: Croatian Bureau of Statistics) 49 (12.1.2). 14 March 2012. ISSN 1330-0350.
- "Bruto domaći proizvod za Republiku Hrvatsku, prostorne jedinice za statistiku 2. razine i županije od 2000. do 2006." [Gross domestic product of the Republic of Croatia, 2nd tier spatial units and counties, from 2000 to 2006]. Priopćenja 2002–2007 (in Croatian) (Zagreb: Croatian Bureau of Statistics) 46 (12.1.5). 3 July 2009. ISSN 1334-0565. Retrieved 8 July 2012.
- "Gross domestic product for Republic of Croatia, statistical regions at level 2 and counties, 2007". Priopćenje DZS (Zagreb: Croatian Bureau of Statistics) 47 (12.1.2). 1 March 2010. ISSN 1330-0350.
- "Gross domestic product for Republic of Croatia, statistical regions at level 2 and counties, 2008". Priopćenje DZS (Zagreb: Croatian Bureau of Statistics) 48 (12.1.2). 11 February 2011. ISSN 1330-0350.
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