Europe

Croatia
Last reviewed: 01 February 2008

Country information

Politics

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ECONOMY

Basic Economic Facts (Source: Croatian National Bank)

GDP: €51 billion (2007)
GDP per head: €11,300 (2007)
Annual Growth: 5.5% (2007)
Inflation: 4.6% (2007)
Official unemployment: 14.3% (2007) (ILO figure 13.1%)
Major Industries: Shipbuilding, cement, chemicals, fertilisers, pharmaceuticals and tourism
Major trading partners: EU, Bosnia and Herzegovina
Exchange Rate: 9.17 Kuna/£ (April 2007)

Croatia's economy has gone through profound transformation since the country gained its independence in 1992. Today it is a functioning market economy with stable macroeconomic indicators but structural reforms are yet to be completed. The microeconomic environment and in particular the competitiveness of the local economy need to be rapidly enhanced.

At present the economy is enjoying relatively fast growth, low inflation and a stable exchange rate. The budget operated a surplus of HRK3.6bn in 2007 due to proceeds from privatisation of the state owned telecoms company T-HT. But the underlying budget deficit remains around 3% of GDP. The State still plays a significant role in the local economy and unemployment (13.1% according to ILO criteria) is high.

The key structural reform issues in Croatia are pension reform, health service reform, state subsidies and privatisation of the state portfolio. Resolving these issues would cut the public wage bill and should help provide the necessary environment to make Croatia's economy more flexible, modern and competitive.

Croatia is a member of the World Trade Organization (WTO) and the Central European Free Trade Area (CEFTA).

Further information on Croatia's economy can be found on the UK Trade & Investment Country Profile: Croatia

World Trade Organisation

Croatian National Bank