Croatia flag Croatia: Economic outline

Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

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). After accelerating in 2019, the economy was severely hit by the crisis linked to the covid-19 pandemic (-8%, one of the worst-hit countries in the EU). Nevertheless, the recovery of Croatia’s economy resumed in 2021, mostly supported by strong household consumption and a better-than-expected performance of the tourism sector: the IMF estimated a growth of 6.3% for the year as a whole. Domestic demand is expected to be the main engine of growth throughout the forecast period, coupled with government expenditure supported by the EU Recovery and Resilience Facility (amounting to 5.3% of GDP overall in the period 2020-23. Hence, GDP growth is forecast at 5.8% this year (reaching the pre-pandemic level) and 4% in 2023, although downward risks linked to the recrudescence of infections persist, due to the country’s relatively low vaccination rates.

Croatia's public debt stood at around 87% of GDP in 2021, significantly higher than in 2019 (72.8%) as a consequence of the necessary government measures to counter the pandemic and the consequent economic downturn. The normalization of the situation should help reduce the ratio over the forecast horizon, at 83.6% and 80.3% this year and the next, respectively (IMF). In 2021, the general government deficit was estimated at 3.5% of GDP (from 5.7% in 2020), thanks to the strong economic recovery and the gradual phasing out of support measures. Counting on revenue increase, the government deficit is expected to be at 2.4% of GDP in 2022 and narrow further in 2023, at 1.6% (IMF). Meanwhile, the rise in global energy and food prices contributed to an increase in inflation, which stood at 2% in 2021 and should remain stable over the forecast period.

According to IMF estimates, unemployment stood to 8.4% in 2020, heavily influenced by the negative economic impact of the COVID-19 pandemic. The rate is expected to follow a downward trend in 2022 (8%) and 2023 (7.6%), driven by the overall expansion of economic activity. Though the average revenue of Croatians is still below the European average (with an estimated GDP per capita PPP of USD 29,777 in 2021 according to the IMF), Croatia remains the second most developed economy of the Balkan region, after Slovenia.

 
Main Indicators 20202021 (e)2022 (e)2023 (e)2024 (e)
GDP (billions USD) 57.2067.7169.3873.4978.74
GDP (Constant Prices, Annual % Change) -8.110.25.93.53.0
GDP per Capita (USD) 14e16171819
General Government Balance (in % of GDP) -5.1-2.8-3.4-2.5-1.9
General Government Gross Debt (in % of GDP) 87.379.872.668.665.9
Inflation Rate (%) 0.12.69.85.53.9
Unemployment Rate (% of the Labour Force) 9.08.16.96.66.1
Current Account (billions USD) -0.062.301.511.461.69
Current Account (in % of GDP) -0.13.42.22.02.1

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Croatian Kuna (HRK) - Average Annual Exchange Rate For 1 GBP 9.198.528.388.258.48

Source: World Bank, 2015

 

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Latest Update: November 2022

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