GDP, current US$ billion
GDP per capita, current US$
Life Expectancy at Birth, years (2018)
After a protracted six-year recession, Croatia returned to growth in 2015. By 2017, Croatia’s GDP per capita had reached almost US$13,500, or in purchasing power parity (PPP) terms, US$22,000 (63% of the European Union [EU] average). Upon joining the EU in mid-2013, Croatia gained access to the EU internal market, which helped connect part of the economy to global value chains. In addition, tourism has been experiencing historic highs in recent years. Yet these factors are not enough to deliver pre-crisis growth rates, and the country still lags behind the income levels of its peers in the EU.
Growth remained solid in the first half of 2018 at 2.7%, and the poverty rate has continued trending downward to 4.6% as the labor market improved and real net wages and disposable income increased. After a surplus for the first time since independence, only a small general government deficit is expected for 2018 and public debt is firmly on a downward path. However, the accelerated outmigration of labor and slow pace of structural reforms risk undermining Croatia’s growth opportunities and hampering the medium-term convergence process.
Croatia could improve its low potential growth by boosting private sector productivity and competitiveness, reforming its justice and regulatory framework, raising the quality of human and physical capital, and modernizing its public services.
Without stepping up its reform agenda, Croatia could experience prolonged economic stagnation and a further worsening of social conditions.
Last Updated: Oct 11, 2018