GDP, current US$ billion
GDP per capita, current US$
Life Expectancy at Birth, years
In January 2023, Croatia became the 20th EU Member State to join the euro area and has entered the Schengen zone, achieving further integration with its European partners and achieving its key strategic objectives. Yet economic convergence is far from complete. GDP per capita (in Purchasing Power Parity nominal terms) reached 70 percent of the average EU27 level in 2021 and further improvements in living standards are highly dependent on productivity improvements.
Croatia’s productivity is lagging behind its regional peers and is far from the best performing European Union members. This reflects low levels of Research & Development (R&D) investment, innovation and technology adoption, weaknesses in managerial and organizational practices, and constraints on competition. In addition, while the quality of services delivery and efficiency of institutions has improved, some lingering structural constraints remain, especially regarding administrative capacity, red tape, and judicial quality and efficiency.
Additional challenges are related to the impact of the war in Ukraine, should geopolitical tensions further amplify. 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. If the NRRP 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: Apr 13, 2023