Croatia

Economic and political outline

Economic indicators | Foreign Trade in figures | Sources of economic information | Political outline

Economic indicators

The Croatian economy is registering optimistic results; thanks to the growing domestic demand stimulated by the recent credit boom led by newly privatized and foreign-capitalized banks, capital investment (mainly in construction of roads), increases in tourism, and gains by small and medium-sized private enterprises. The country recorded a GDP growth rate of 4.3% in 2005, 4.8% in 2006, 5.6% en 2007. Nevertheless the IMF forecasts a 4.7% GDP growth rate in 2008. The inflation is under control; remaining 2.3% during 2007. In order to streamline the country's economy, the government of Croatia has tightened its budget, started privatization and adopted policies favoring opening of the country's economy to the international trade. Croatian faces a high unemployment rate (16% of the active population).

GDP Indicators	2004	2005	2006	2007	2008
GDP (billions USD)	35.65	38.88	42.92	50.05e	54.95e
GDP (constant prices, annual % change)	4.3	4.3	4.8	5.6e	4.7e
GDP per capita (USD)	8,029.97	8,753.37	9,664.09	11,271.37e	12,374.28e
Inflation rate (%)	2.0	3.3	3.2	2.3e	2.8e
Unemployment rate (% of the labor force)	13.8	12.7	11.1	n.c.	n.c.
Current Account (billions USD)	-1.81	-2.48	-3.35	-4.20e	-4.83e
Current Account (in % of GDP)	-5.1	-6.4	-7.8	-8.4e	-8.8e

Source: IMF - World Economic Outlook Database; ILO, Laborstat - Yearly Statistics

Note: (e) Estimated data

Socio-demographic indicators	2004	2005	2006
Unemployment rate (%)	13.8	12.7	11.1

Source:

Main sectors of industry

The agriculture sector constitutes nearly 6.62% of country's GDP in 2006. Croatia mainly produces wheat, corn, sugar beet, fruits, wine and olive oil. More than one-third of Croatia is covered with forest and thus wood industry is one of the core sectors in its economy. The country has limited mineral resources. The industrial sector is focused mainly on the highly competitive activities such as textile, wood, iron & steel, aluminium and food-processing. The tourism sector is in full bloom. Euromonitor predicts a growth of 42% in this sector between 2005 and 2010. Nearly 10 millions tourists visited Croatia each years.

Breakdown of economic activity by sector	Agriculture	Industry	Services
Value added (annual % change)	5.8	4.7	1.1
Value added (in % of GDP)	6.6	31.0	62.3
Employment by sector (in % of total employment)	17.3	28.6	54.0

Source: World Bank - World Development Indicators - last available data.

Monetary indicators	2002	2003	2004	2005	2006
Average annual exchange rate for 1 USD	7.87	6.70	6.03	5.95	5.84

Source: World Bank - World Development Indicators

Foreign trade in figures

Croatia joined the WTO in 2000 and has also signed an Agreement of Association with the European Union in 2001.Croatia is heavily dependent on foreign trade; its share in the country's GDP was 104.7% in 2006. Croatia's top three export partners are: Italy, Bosnia and Germany; while as its top three import partners are: Italy, Germany and Russia. Croatia mainly exports mineral fuels & oils, ships & boats, electric & mechanical equipment & machinery, and wood & wooden articles; while as the products mainly imported are mineral fuels & oils, electric & mechanical equipment & machinery and vehicles. The most promising sectors in the country are tourism, building & construction, telecommunications, and the retail sector.

Foreign trade indicators	2002	2003	2004	2005	2006
Imports of goods (millions USD)	10,652	14,216	16,560	18,301	21,117
Exports of goods (millions USD)	5,004	6,308	8,210	8,955	10,606
Imports of services (millions USD)	2,414	2,982	3,565	3,400	3,541
Exports of services (millions USD)	5,582	8,569	9,373	9,921	10,807
Imports of goods and services (annual % change)	13.4	12.1	3.5	3.5	6.0
Exports of goods and services (annual % change)	1.2	11.4	5.4	4.6	6.4
Imports of goods and services (in % of GDP)	56.4	57.9	56.1	55.2	55.9
Exports of goods and services (in % of GDP)	45.3	47.1	46.9	46.6	48.4
Trade Balance (millions USD)	-5,648	-7,908	-8,350	-9,346	-10,511
Trade Balance (including service) (millions USD)	-2,480	-2,321	-2,543	-2,825	-3,245
Current Account (millions USD)	-1,915	-2,132	-1,841	-2,576	-3,175
Current Account (in % of GDP)	-8.3	-7.2	-5.2	-6.6	-7.4
Foreign trade (in % of GDP)	101.7	105.0	103.1	101.8	104.2

Source: World Bank - World Development Indicators

Main partner countries

Main customers (% of exports)	2006
Italy	23.1%
Bosnia and Herzegovina	12.6%
Germany	10.3%
Slovenia	8.2%
Austria	6.0%

Main suppliers (% of imports)	2006
Italy	16.7%
Germany	14.5%
Russia	10.1%
Slovenia	6.3%
Austria	5.4%

Source: 2006

Main products

Main exports (% of exports)	2006
Mineral fuels, mineral oils	15.1%
Boats and floating structures	11.4%
Electrical machinery and equipment	8.7%
Machinery and mechanical appliances	7.2%
Wood and articles of wood, wood charcoal	4.0%

Main imports (% of imports)	2006
Mineral fuels, mineral oils	15.9%
Machinery and mechanical appliances	11.8%
Vehicles other than railway or tramway	9.5%
Electrical machinery and equipment	8.2%
Plastics	3.8%

Source: 2006

To see more products: More imports (Intracen Data)
More exports (Intracen Data)

Sources of economic information

Ministries: Ministry of Economy Ministry of Finance
Statistical Office: Croatian Bureau of Statistics
Central Bank: Croatian National Bank
Stock Exchange: Zagreb Stock Exchange
Search Engines: Pogodak
Cro Web
Croatian Web directory

Political outline

Executive Power: The legislature is unicameral. The Parliament is a legislative body whose members are elected from party lists by popular vote to serve four-year terms. The constitution has been changed to shift power away from the President to the Parliament. People of Croatia have considerable political rights.
Legislative Power: President is the chief of the state, elected by popular vote for a five-year term. President can dissolve the Parliament and call for elections. President is also the commander-in-chief of the armed forces. The President appoints the Prime Minister and the Cabinet with the consent of Parliament. Prime Minister holds the executive powers.
Main political parties: Croatia has a multi-party system. The major political parties in the country are:
- HDZ (Croatian Democratic Union) - socialist, conservative, right-wing, advocates political and economic liberalisation;
- SDP (Social democratic party) - left-wing, ex-communist party;
- HNS (Croatian People's Party - Liberal Democrats) - liberal, democratic, advoactes economic reforms,
- HSP (Croatian Party of Rights) - nationalist, right-wing, advocates ethno-centric politics;
- HSS (Croatian Peasant Party) - left-wing, conservative, advocates pro-agrarian politices;
- HSU (Croatian Pensioner Party) - protects the interest of pensioners, draws support from labour unions as well.,
Current political leaders: President: Stjepan (Stipe) MESIC (since February 2000, re-elected in January 2005) - HNS
Prime Minister: Ivo SANADER (since December 2003) – HDZ
Next election dates: Presidential: January 2010
Parliamentary: Year 2011