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flag Croatia Croatia: Economic and Political Outline

Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

Economic Indicators

The Croatian economy is showing encouraging results. Growth in domestic demand sustains the economic dynamism, which in turn is stimulated by the recent credit boom following the privatization of banks and their acquisition by foreign capital, investments (mainly in road construction), the dynamism of the tourism sector and the profits of the SMEs. The growth rate of the GDP has been progressive: 4.7% in 2006 and 5.5% in 2007. In order to maintain the national economy, the Croatian government has re-tightened its budget. It has started privatizations and adopted policies that promote opening the country's economy to international trade.
Nevertheless, economic growth has slowed down since 2008 and especially in 2009, mainly because of low consumption in the country, the drop in domestic demand and exports. Croatia faces a high unemployment rate of around 15% of the active population. Inflation is under control, remaining under 3%. Croatia was affected by the economic crisis but to a lesser extent, compared to other European countries. The country adopted economic recovery measures at the beginning of the crisis and injected funds into the banking sector, which enabled the country to be prepared to face the effects of the crisis. Nevertheless, there was an economy slowdown in Croatia and the tourism sector, which is one of the economy's drivers, faced a decline in the number of foreign visitors.

In 2010, the country entered into recession during the first six months of the year and the GDP continued to decrease.  According to financial analysts, the economic situation in Croatia will not improve much in 2011 and 2012.  The country has to face several challenges: domestic and foreign financial imbalance, maladjusted fiscal policies, reduction in household consumption, rise in unemployment and a lack of investments in the key sectors.

 
Main Indicators 2009201020112012 (e)2013 (e)
GDP (billions USD) 63.4460.8364.1666.9470.13
GDP (Constant Prices, Annual % Change) -6.0-1.2e0.81.82.5
GDP per Capita (USD) 14,32413,776e14,52915,15715,880
General Government Gross Debt (in % of GDP) 34.540.647.5e50.051.9
Inflation Rate (%) 2.41.0e3.2e2.42.2
Unemployment Rate (% of the Labor Force) 9.112.212.712.211.7
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

Main Sectors of Industry

The agricultural sector represents more than 6% of the country's GDP. Croatia mainly produces wheat, corn, sugar beet, fruits, wine and olive oil.
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 90% of the total workers and experienced a reduction of 12% during the first six months of 2009. Industrial production slowed down by 10% in the first semester of 2009. This is due to a backlash of the global economic crisis which also affected Croatia.
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.

 
 
Monetary Indicators 20062007200820092010
Croatian Kuna (HRK) - Average Annual Exchange Rate For 1 USD 5.845.364.945.285.50

Source: World Bank - Last Available Data.

 
 
Learn more about Market Analysis about Croatia on Globaltrade.net, the Directory for International Trade Services.
 

Indicator of Economic Freedom

Score:
61.1/100
Position:
Moderately free
World Rank:
79/179
Regional Rank:
34/42

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

 

Country Risk

See the Country Risk Analysis Provided By Ducroire.

 

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Foreign Trade in Figures

Croatia joined the WTO in 2000 and has also signed an Agreement of Association with the European Union in 2001. Its economy depends heavily on foreign trade. The foreign trade's contribution to the GDP was of 105% in 2008. Croatia's three main trade partners are Italy, Bosnia and Germany. Its three main suppliers are Italy, Germany and Russia. Croatia mainly exports mineral fuels, ships, boats, electric & mechanical machinery, equipment, wood and wooden articles. Fuels, equipment and machinery as well as vehicles are also significant import items. The most promising sectors are tourism, construction, telecommunications, and retail sales.

The Croatian trade balance is constantly 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.

 
Foreign Trade Indicators 20062007200820092010
Imports of Goods (million USD) 21,50225,83930,72821,20320,054
Exports of Goods (million USD) 10,37712,36414,11210,47411,807
Imports of Services (million USD) 3,4913,8424,5063,7913,499
Exports of Services (million USD) 10,80012,47014,76011,72510,923
Imports of Goods and Services (Annual % Change) 8.36.23.6-20.7-1.9
Exports of Goods and Services (Annual % Change) 5.83.71.7-16.26.3
Imports of Goods and Services (in % of GDP) 49.849.849.939.240.4
Exports of Goods and Services (in % of GDP) 42.742.141.635.938.6
Trade Balance (million USD) -10,486-12,933-15,956-10,290-7,877
Trade Balance (Including Service) (million USD) -3,142-4,235-5,213-2,143-309
Foreign Trade (in % of GDP) 92.491.991.475.079.0

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2010
Italy 18.7%
Bosnia and Herzegovina 11.6%
Germany 10.3%
Slovenia 7.8%
Austria 5.3%
See More Countries 46.3%
Main Suppliers
(% of Imports)
2010
Italy 15.2%
Germany 12.5%
Russia 9.0%
China 7.2%
Slovenia 5.8%
See More Countries 50.2%

Source: Comtrade, Last Available Data

 

Main Products

Main Exports
(% of Exports)
2010
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 9.4%
Cruise ships, excursion boats, ferry-boats, cargo...Cruise ships, excursion boats, ferry-boats, cargo ships, barges and similar vessels for the transport of persons or goods 7.1%
Light-vessels, fire-floats, dredgers, floating...Light-vessels, fire-floats, dredgers, floating cranes, and other vessels the navigability of which is subsidiary to their main function; floating docks, floating or submersible drilling or production platforms (excl. fishing vessels and warships) 3.6%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 3.4%
Electrical transformers, static converters, e.g....Electrical transformers, static converters, e.g. rectifiers, and inductors; parts thereof 3.3%
See More Products 73.2%
Main Imports
(% of Imports)
2010
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 10.1%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 4.2%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 3.0%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 2.9%
Electrical energyElectrical energy 1.9%
See More Products 77.8%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 

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Sources of General Economic Information

Ministries
Ministry of Economy, Labour and Entrepreneurship
Ministry of Finance
Statistical Office
Croatian Bureau of Statistics
Central Bank
Croatian National Bank
Stock Exchange
Zagreb Stock Exchange
Search Engines
Pogodak
Cro Web
Croatian Web directory
Economic Portals
SEEbiz.eu - Regional Business Multilanguage web portal covering Croatia, Serbia, Slovenia, Bosnia, Macedonia and Montenegro.
Croatian Information Centre

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Political Outline

Executive Power
The legislature is unicameral. The Parliament is a legislative body whose members are elected from party lists by popular vote to serve four-year terms. The constitution has been changed to shift power away from the President to the Parliament. People of Croatia have considerable political rights.
Legislative Power
President is the chief of the state, elected by popular vote for a five-year term. President can dissolve the Parliament and call for elections. President is also the commander-in-chief of the armed forces. The President appoints the Prime Minister and the Cabinet with the consent of Parliament. Prime Minister holds the executive powers.
Main Political Parties
Croatia has a multi-party system. The major political parties in the country are:
- HDZ (Croatian Democratic Union) - socialist, conservative, right-wing, advocates political and economic liberalisation;
- SDP (Social democratic party) - left-wing, ex-communist party;
- HNS (Croatian People's Party - Liberal Democrats) - liberal, democratic, advoactes economic reforms,
- HSP (Croatian Party of Rights) - nationalist, right-wing, advocates ethno-centric politics;
- HSS (Croatian Peasant Party) - left-wing, conservative, advocates pro-agrarian politices;
- HSU (Croatian Pensioner Party) - protects the interest of pensioners, draws support from labour unions as well.,
Current Political Leaders
President: Ivo Josipovic (since January 2010) - SDP
Prime Minister: Zoran MILANOVIC (since 23 December 2011) – SDP
Next Election Dates
Presidential: December 2015
 

Indicator of Freedom of the Press

World Rank:
63/178
Evolution:
15 places up compared to 2009

Source: Worldwide Press Freedom Index 2010, Reporters Without Borders

 

Indicator of Political Freedom

Ranking:
Free
Political Freedom:
1/7
Civil Liberties:
2/7

Map of freedom 2010

 

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Last Updates: January 2012