CROATIA
The Land of unique beauty , ancient history and rich cultural heritage
Total area: 87,661 sq km
Population: 4.48 million
Government type: Parliamentary democracy
Administrative division: 20 counties
Capital + other major cities: Zagreb (779,145) + Split (189,444), Rijeka (167,757)
Currency: Kuna (HRK)
Languages: Croatian (official)
Ethnicity: Croat (89.6%), Serb (4.5%), other (5.9%)
Religion: Rom. Catholic 87.8%, Orthodox 4.4%, other Christian 0.4%, Muslim 1.3%, other and unspecified 0.9%, none 5.2%
President: (Mr.) Ivo Josipovic (since 18 February 2010)
Prime Minister:(Mr.) Zoran Milanovic (since 23 December 2011)
Date of EU accession: target: July 2013 (Croatia will become a member after all 27 EU members ratify the treaty)
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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 will eventually propel Croatia towards full EU membership. Accession of Croatia to the EU is expected as soon as 1 July 2013.
MACROECONOMIC OVERVIEW
Prior to the economic crisis that hit the country in late 2008, Croatia’s small and open economy belonged to one of the fastest growing transitional economies in CEE. However, its real GDP growth decelerated from 5.1% in 2007 to 2.2% in 2008, and then in 2009 and 2010 the economy shrank by 6% and 1.2% respectively. It returned to a growth path (0.6%) in 2011.
Over the last decade, the national industry enjoyed growth in manufacturing volume and productivity resulting.
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 country's recent economic performance is also characterised by low volumes of FDI. In 2010, FDI declined by 80% compared to 2009, reaching EUR 440 million.
Selected economic indicators, Croatia, 2007 - 2013
| |
|
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
| GDP |
|
|
|
|
|
|
|
|
| Real GDP growth |
% |
5.1 |
2.2 |
-6.0 |
-1.2 |
0.6 |
0.8 |
1.2 |
| GDP at current prices |
€ bn |
43.38 |
47.54 |
44.78 |
45.90 |
46.02 |
46.37 |
47.74 |
| Foreign trade |
|
|
|
|
|
|
|
|
| Exports |
€ bn |
18.3 |
19.9 |
16.2 |
17.6 |
18.1 |
18.6 |
19.7 |
| Imports |
€ bn |
21.6 |
23.8 |
18.0 |
17.8 |
18.0 |
18.1 |
19.4 |
| Balance |
€ bn |
-3.3 |
-3.9 |
-1.8 |
-0.2 |
0.1 |
0.5 |
0.3 |
| Prices |
|
|
|
|
|
|
|
|
| CPI - average inflation rate |
% |
2.7 |
5.8 |
2.2 |
1.1 |
2.2 |
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| Employment |
|
|
|
|
|
|
|
|
| Registered unemployment |
% |
14.8 |
13.2 |
14.9 |
17.4 |
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|
|
| Average monthly gross wage |
€ |
962 |
1029 |
1055 |
1039 |
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| Exchange rates |
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| HRK/USD average |
|
5.36 |
4.93 |
5.28 |
5.50 |
5.34 |
|
|
| Currency board fixed rate: HRK/EUR |
|
7.33 |
7.22 |
7.34 |
7.28 |
7.43 |
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|
Source:
KEY SECTORS
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.
Croatia belongs to the leading tourist destinations in the Mediterranean region.
INDUSTRY
In the past decade, the Croatian industry saw significant manufacturing and productivity growth resulting from a full-scale restructuring process and adaptation to the global competitive environment.
Consequences of the global financial crisis were first noticed at the end of 2008, taking the form of decelerating growth in terms of manufacturing volumes, productivity, employment and foreign exchange of goods in 2009. This negative trend in the industry production has been observed until the end of 2010 when the further production decrease was slowly brought to a halt.
In terms of exports, the manufacture of refined petroleum products and electrical and optical equipment, shipbuilding, manufacture of food and beverages, machinery and appliances as well as chemicals and chemical products traditionally lead the way.
FOREIGN DIRECT INVESTMENT (FDI)
Total foreign investment in Croatia from 1993 to the 2010 amounted to € 24.5 billion.
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