Financial situation in Croatia Ivan Dolini ć (Jackson) Student ID: MA2N

Croatia

Croatia in EU Became a 28 th member of the EU on July 1 st 2013 Croatia’s competitiveness to compete in the large EU market and maximize the opportunities that membership brings

Financial crisis global financial crisis of Croatian economy grew at a healthy 4-5% annually economic and social opportunities dramatically improved lost over 12 % of its output in last 6 years of crisis

Gross Domestic Product (GDP) estimated to fall by 0.5% in 2014 optimism about the prospect for growth in 2015, with exports projected to pick up in the Eurozone and private investments expected to increase The privatization of large state-owned enterprises (SOEs) and the availability of EU funds (in net terms about 2% of GDP per year) should also help growth prospects in the medium term

Unemployment 17% at the end of 2013 youth unemployment at over 40% the highest in Europe The private sector has been bearing the brunt of the crisis with most jobs lost in manufacturing, construction, and trade

Croatian economy less competitive than its peers From 2007 to 2013, Croatia’s private sector share of GDP remained at 70% actions are needed to liberalize the labor market, jump-start enterprise restructuring and the kind of new business creation and old firm exits required for the economy to reorient itself toward one reliant on knowledge, innovation, and transit-related services to maximize its geo-economic advantage as Europe’s transport hub

Future forecast Real GDP growth in 2015 is forecast to be just above zero the positive contribution of external demand is forecast to decrease In 2016, a rebound in investment is expected to push growth more firmly into positive territory

Sources of income The industrial sector with exports of over €1 billion annually is dominated by shipbuilding which accounts for over 10% of exported goods Food processing and chemical industry also account for significant portions of industrial output and exports Industrial sector represents 27% of Croatia’s total economic output while agriculture represents 6% Croatian agricultural sector subsists from exports of blue water fish

Sources of income notable producer of organic foods and much of it is exported to the European Union Croatian wines, olive oil and lavender are particularly sought after Tourism is traditionally a notable source of income, particularly during the summer months, but also more recently during the winter months as well, due to an increase in popularity of snow sports such as skiing over 10 million foreign tourists annually, tourism generates revenue in excess of €7 billion ranked among the top 20 most popular tourist destinations in the world and was voted world's top tourism destination in 2005 by Lonely Planet