GDP, current US$ billion
GDP per capita, current US$
Life Expectancy at Birth, years (2018)
The large reliance on tourism makes Croatia highly vulnerable to adverse external shocks such as the current pandemic. GDP contraction in Croatia in 2020, at - 8.4 percent, was one of the largest in the European Union (EU) and in the Europe and Central Asia region. Going forward, EU funding through various sources aimed at restarting the economy and weathering the crises should play a key role in supporting the country’s economic recovery.
Croatia will need to use EU funds effectively for priority investments and accelerate reforms to address long-standing structural issues. Growth should be green, help in the country’s digital transformation, and support the development of a resilient economy. Although the vaccination program has started, the situation remains highly uncertain because of vaccine supply bottlenecks and the recent increase in infections due to the new virus variants.
At 65.2 percent of the EU27 GDP per capita in 2019 (purchasing power parity [PPP]), Croatia still lags behind its EU peers. Strengthening long-term growth is critical to accelerating the income convergence. This will require diversifying the economy toward more knowledge-based sectors and addressing the economy’s structural issues, including public sector governance, education outcomes, and the efficiency of the judiciary. On the fiscal front, the surge in public debt in 2020, reflecting the economic downturn and a large fiscal stimulus package, calls for fiscal prudence and greater efforts to increase the effectiveness and efficiency of public spending over the coming years.
Last Updated: Apr 07, 2021