engleski

Croatia: economy

The year 2013 was the fifth year of negative growth in Croatia ; with the GDP figures for the first quarter of 2014 further indicating a continuation of the recessionary trends in the economy. This makes one of the longest recessions among the EU countries. Moreover, trends in industrial production continue to highlight severe structural weaknesses of the Croatian economy where in the period from 2009 to 2013 industrial production fell overall by 18.8%. In the labour market, the main problem is the high level of long-term unemployment, especially registered youth unemployment (that reached 50.50% in 2013) which is among highest in the EU. The financial crisis has also underlined the difficulty of bringing public finances into balance, with often Budget revisions and changes within the tax system. Regarding the international environment, since 2008, when the crisis began, the current account deficit started to narrow and in 2013 Croatia reached a surplus of 1.3% of GDP ; mainly due to contraction of imports of goods and services. Growth prospects for 2014 are not very optimistic either especially since the European Commission included Croatia into Excessive Deficit Procedure this spring and further severe cuts of budget spending were planned. Finally, more profound EU demand for Croatia’s exports and better use of available EU funding could benefit the economy, contributing to a stronger recovery in FDI and a faster rate of economic growth in the long term. However, the short-term prospects remain rather uncertain, as the underlying domestic risks might offset the positive contribution of EU accession to economic growth.

Croatia; economic development, economic perfomance, economic outlook

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