In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response
After becoming the 28th member state of the EU on July 1, 2013, the Croatian economy was only able to return to growth in 2015: since 2008, the country had experienced six consecutive years of economic recession, with the GDP falling by 12% (EU data). In recent years, the country managed to recover and return to its pre-crisis level already in 2021. After growing 6.2% in 2022, Croatia's GDP growth is estimated to have remained robust at 2.7% last year. Economic activity was buoyed by domestic demand, with private consumption benefiting from favorable wage trends and positive consumer sentiment. Strong investment growth was bolstered by EU funds. In 2024, real GDP is expected to grow by 2.6%, primarily driven by robust domestic demand and reflecting substantial carry-over effects from previous periods (IMF). Investment and public consumption growth are projected to slow down but maintain strength, given the ongoing execution of the Recovery and Resilience Plan and anticipated improvements in financing conditions.
Croatia's public debt stood at 63.8% of GDP in 2023, down from 68.8% one year earlier, with the ratio expected to decrease further this year (61.8%) and in 2025 (60.3%). In 1H23, budget performance demonstrated strength due to the surge in indirect tax revenues driven by elevated inflation. However, expenses escalated in the latter part of the year due to the costs associated with pension indexation, the recent support package, and the increments in public sector wages. The overall budget deficit was estimated at 1.3% of GDP by the IMF. Lower nominal growth and adjustments to personal income taxation and social contribution rates should lead to diminished budget revenues in 2024, resulting in a projected deficit of 2.1% of GDP (IMF). In 2023, HICP inflation dropped to 8.6%, down from 10.7% in 2022, with inflation excluding energy and food reaching 8.8%. Both surpassed the respective euro area rates of 5.4% and 5%. The slowdown in HICP inflation throughout 2023 was primarily influenced by declines in energy and processed food prices. Meanwhile, services inflation demonstrated greater persistence. Inflation is anticipated to reach 4.2% and 2.5% in 2024 and 2025, respectively, with the prices of energy and unprocessed food forecasted to be the main drivers of the downward trend. Meanwhile, services inflation is expected to remain relatively stable.
According to IMF estimates, unemployment decreased to 6.3% in 2023, from 6.8% one year earlier, and is expected to follow a downward trend in 2024 (5.9%) and 2025 (5.6%). The government sector is anticipated to provide substantial support to wage growth, particularly with significant (one-off) increases expected as part of the public sector wage-setting reform. Though the average revenue of Croatians is still below the European one (with an estimated GDP per capita PPP of USD 40,380 in 2022 according to the World Bank), Croatia remains the second most developed economy of the Balkan region, after Slovenia.
Main Indicators | 2022 | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) |
---|---|---|---|---|---|
GDP (billions USD) | 71.66 | 82.04 | 88.08 | 92.32 | 97.05 |
GDP (Constant Prices, Annual % Change) | 6.3 | 2.8 | 3.0 | 2.7 | 2.7 |
GDP per Capita (USD) | 18,583 | 21,347 | 22,966 | 24,111 | 25,391 |
General Government Balance (in % of GDP) | -0.8 | -0.5 | -1.9 | -1.5 | -1.2 |
General Government Gross Debt (in % of GDP) | 68.2 | 63.5 | 59.5 | 58.4 | 57.1 |
Inflation Rate (%) | 10.7 | 8.4 | 3.7 | 2.2 | 2.2 |
Unemployment Rate (% of the Labour Force) | 6.8 | 6.2 | 5.8 | 5.5 | 5.5 |
Current Account (billions USD) | -2.00 | 1.02 | 1.28 | 0.86 | 0.37 |
Current Account (in % of GDP) | -2.8 | 1.2 | 1.5 | 0.9 | 0.4 |
Source: IMF – World Economic Outlook Database , Latest available data
Note: (e) Estimated Data
The agricultural sector represents only 3.1% of the country's GDP and employs 6% of the workforce (World Bank, latest data available). Croatia has 1.5 million hectares of agricultural land and more than 1.9 million hectares of forests (FAO). The country is self-sufficient in the production of wheat, corn, sugar beet, fruits, wine, and olive oil; however, imports of agricultural products have been on the rise in recent years. The size of the farms is generally small (in most cases less than 3 hectares). According to preliminary figures from the State Bureau of Statistics (DZS), the net added value of the agricultural sector for 2023 was projected at EUR 1.8 billion, marking a decrease of 2.3% in relation to the previous year. Concerning the value of agricultural production, the latest projection pointed to an increase of 0.8%, to EUR 3.2 billion.
The secondary sector contributes 19.9% of GDP and employs 28% of the active population. Croatian industry is concentrated in competitive activities: textiles, wood, steel industry, aluminium, 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 sector is estimated to contribute 12% of the national value added. Figures from the State Bureau of Statistics (DZS) show Croatia's industrial output dipped 0.1% on the year in 2023, after growing 1.6% one year earlier.
The service sector represents 60.9% of the country’s GDP, employing 66% of the workforce. The tourism sector, in particular, is among the key segments of the Croatian economy, accounting for almost a quarter of GDP, by far the largest share in the EU. After being hit hard by the economic crisis following the COVID-19 pandemic, the tourism sector recovered in 2023, welcoming 20.6 million travelers who made 108 million overnight stays, which was 9% and 3% higher compared to 2022, equaling the 2019 record year (DZS). Five foreign-owned banks control over 80% of total assets and net profit in the country's banking system (S&P).
Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
---|---|---|---|
Employment By Sector (in % of Total Employment) | 6.8 | 28.8 | 64.4 |
Value Added (in % of GDP) | 2.5 | 19.5 | 61.3 |
Value Added (Annual % Change) | 6.0 | 2.4 | 7.8 |
Source: World Bank - Latest available data.
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Monetary Indicators | 2016 | 2017 | 2018 | 2019 | 2020 |
---|---|---|---|---|---|
Croatian Kuna (HRK) - Average Annual Exchange Rate For 1 MUR | 0.19 | 0.19 | 0.19 | 0.19 | 0.17 |
Source: World Bank - Latest available data.
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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, labour 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.
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024
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Croatia joined the WTO in 2000 and depends heavily on foreign trade, which amounts to 125% of the GDP (World Bank, latest data available). The country mainly exports petroleum oils (6.3%), electrical energy (5.8%), petroleum gas and other gaseous hydrocarbons (5.6%), medicaments (2.7%), wood sawn or chipped lengthwise (2.3%); while imports are driven by petroleum gas and other gaseous hydrocarbons (9.4%), petroleum oils (non-crude) (6.9%), electrical energy (5.1%), motor cars and other motor vehicles (3.4%), petroleum oils and oils (crude) (2.9% - data Comtrade 2022).
In 2022, the main export partners were Italy (12.2%), Slovenia (11.6%), Germany (11.4%), Hungary (11.2%), and Bosnia and Herzegovina (10.4%). In the same period, the leading import origins were Italy (13.8%), Germany (12.5%), Slovenia (10.8%), the United States (7.6%), and Hungary (7.3% - Comtrade). Overall, the EU accounted for 68.7% of total exports and 70.4% for imports (DZS).
In terms of merchandise, Croatia has a structural trade deficit: according to figures by the WTO, in 2022 exports of goods totaled USD 25.3 billion (+15.6% y-o-y) while imports increased by 28.3%, to USD 44.3 billion. However, the country is a net exporter of services, with exports – at USD 20.9 billion – far above imports (USD 6 billion). According to figures by the World Bank, the overall trade deficit stood at an estimated 6.2% of GDP in 2022, much higher than the level of 2.7% recorded one year earlier. Preliminary figures from the Croatian Bureau of Statistics show that in 2023 exports declined by 5.3% year-on-year to EUR 22.834 billion, while imports saw a 6% decrease to EUR 39.373 billion.
Foreign Trade Indicators | 2019 | 2020 | 2021 | 2022 | 2023 |
---|---|---|---|---|---|
Imports of Goods (million USD) | 28,160 | 26,830 | 34,527 | 44,623 | 43,181 |
Exports of Goods (million USD) | 17,180 | 17,193 | 21,878 | 25,467 | 24,894 |
Imports of Services (million USD) | 5,691 | 4,140 | 5,301 | 6,050 | 7,265 |
Exports of Services (million USD) | 17,177 | 10,285 | 16,885 | 20,341 | 24,292 |
Imports of Goods and Services (Annual % Change) | 6.6 | -12.4 | 17.6 | 25.0 | n/a |
Exports of Goods and Services (Annual % Change) | 6.8 | -23.3 | 36.4 | 25.4 | n/a |
Imports of Goods and Services (in % of GDP) | 51.0 | 48.5 | 52.7 | 65.3 | n/a |
Exports of Goods and Services (in % of GDP) | 50.6 | 41.5 | 51.3 | 60.6 | n/a |
Trade Balance (million USD) | -11,754 | -10,083 | -12,602 | -18,906 | n/a |
Trade Balance (Including Service) (million USD) | -289 | -3,948 | -1,023 | -4,355 | n/a |
Foreign Trade (in % of GDP) | 101.6 | 90.0 | 104.0 | 125.9 | n/a |
Source: WTO – World Trade Organisation ; World Bank , Latest Available Data
Main Customers (% of Exports) |
2023 |
---|---|
Italy | 12.2% |
Germany | 12.2% |
Slovenia | 11.2% |
Bosnia and Herzegovina | 10.1% |
Hungary | 6.9% |
See More Countries | 47.4% |
Main Suppliers (% of Imports) |
2023 |
---|---|
Italy | 14.5% |
Germany | 14.2% |
Slovenia | 11.5% |
Hungary | 6.4% |
Austria | 5.5% |
See More Countries | 47.8% |
Source: Comtrade, Latest Available Data
Source: Comtrade, Latest Available Data
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23.0 bn USD of services exported in 2023 | |
---|---|
68.76% | |
11.08% | |
Miscellaneous business,...Miscellaneous business, professional, and technical services | 9.90% |
Research and developmentResearch and development | 1.18% |
7.99% | |
7.38% | |
2.18% | |
1.15% | |
0.65% | |
0.59% | |
0.22% |
7.0 bn USD of services imported in 2023 | |
---|---|
29.39% | |
Miscellaneous business,...Miscellaneous business, professional, and technical services | 28.56% |
Research and developmentResearch and development | 0.82% |
27.38% | |
15.75% | |
10.67% | |
6.78% | |
3.68% | |
2.21% | |
1.78% | |
1.67% | |
0.68% |
Source: United Nations Statistics Division, Latest Available Data
- Croatian Democratic Union (HDZ): centre-right, socialist, conservative, advocates political and economic liberalisation, typically dominated the political scene since 1991 and is the current leader of the ruling coalition
- Social Democrats: centre-left. It was founded in 2022 by a parliamentary group that left the Social Democratic Party
- Social Democratic Party (SDP): centre-left, ex-communist party, it is the main opposition party
- Homeland Movement (DP): Croatian nationalism, social conservativism, Euroscepticism
- Croatian People's Party (HNS): centre, liberal, advocates economic reforms. Supports the current government
- The Bridge (MOST): centre, centre right, fiscal conservatism, liberalism
- Croatian Peasant Party (HSS): agrarian, green liberalism
- Workers' Front (RF): left-wing
- Civic Liberal Alliance (GLAS): liberalism, social liberalism
- Croatian Social Liberal Party (HSLS): centre to centre-right, conservative
- Centre: liberal
- Green–Left Coalition: left-wing ecologist political alliance
- Independent Democratic Serb Party (SDSS): Serb minority politics, advocates for social democracy
- Istrian Democratic Assembly (IDS-DDI): Istrian Regionalism, liberalism.
The world rankings, published annually, measures 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 are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. 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.).
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.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
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Latest Update: November 2024