GDP, current US$ billion
GDP per capita, current US$
Life Expectancy at Birth, years
Croatia is set to join the eurozone on January 01, 2023. Should there be no unforeseen obstacles, Croatia should also join the Schengen area next year. While these achievements are expected to strengthen the country’s resilience and bring long-term economic benefits, raising potential growth will still primarily depend on prudent national policies.
Croatia’s relatively low productivity remains a key obstacle for faster convergence towards average EU income levels. This highlights the need to increase the dynamism of the Croatian business environment, reduce market inefficiencies, improve human capital, and promote investment. In addition, demographic forecasts suggest that strengthening long-term growth will also require policies to mitigate the negative economic impact of a declining and aging population.
Additional challenges are related to the impact of the war in Ukraine, particularly rising energy and food costs, declining real incomes as a result of rising inflation, monetary policy tightening, rising financing costs, and uncertainty. In this challenging environment, EU structural and investment funds, as well as the new EU initiatives, represent an opportunity for Croatia to accelerate income convergence with the rest of the EU.
The Croatian National Recovery and Resilience Plan (NRRP) serves as a plan for the Recovery and Resilience Facility funds. The Plan includes a bold reform agenda for the medium term and presents a unique opportunity to close some of the reform and investment gaps that are still holding the country back. If this plan is fully and efficiently implemented, Croatia can create better foundations for long-term growth, and create a more resilient, greener, and equal society.
Last Updated: Oct 12, 2022