Economy of Croatia

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Croatia
Flag of Croatia.svg
World economic rank 79th (nominal) (2017)
currency Kuna (HRK)
Conversion rate 1 HRK = 0.13477 EUR
Key figures
Gross domestic
product (GDP) 		$ 57.371 billion (nominal) (2013)
$ 86.570 billion (PPP) (2013)
GDP per capita $ 13,401 (nominal) (2013)
$ 20,221 (PPP) (2013)
GDP by economic sector Agriculture : 6.4% (2008)
Industry : 28.5% (2008)
Services : 65% (2008)
growth   + 3.9% (2019Q1)
inflation rate 1,475% (2019)
Employed 1.56 million (2010)
Activity rate approx. 35% (real)
Unemployment rate   6.7% (2019)
Foreign trade
export $ 14.12 billion (2008)
Export goods Industrial goods, consumer goods
Export partner Italy : 19.1% (2008)
Bosnia and Herzegovina : 15.4% (2008)
Germany : 10.7% (2008)
import $ 30.73 billion (2008)
Import goods Industrial goods, capital goods , fuels and lubricants
Import partner Italy : 17.1% (2008)
Germany : 13.4% (2008)
Russia : 10.4% (2008)
Foreign trade balance $ −16.6 billion (2008)
public finances
Public debt 35.3% of GDP (2009)
Budget balance 4.1% of GDP (2009)

This article deals with the situation and development of Croatia's economy .

History and general

When Croatia was still part of the Danube Monarchy , the economy was largely agricultural. However, there were also modern industrial plants in the vicinity of the larger cities. In the Kingdom of Yugoslavia, which later emerged, the Croatian economy was much more advanced than that in the eastern parts of the country.

After the Second World War, a period of industrialization followed . In accordance with the socialist plan, companies in the pharmaceutical , food and consumer goods industries were established in Croatia . The metal and heavy industry was mainly promoted in Bosnia and Serbia.

From the sixties, tourism began to develop along the coast . A significant part of the profits from the Croatian economy had to be transferred to poorer parts of Yugoslavia.

During the time of Yugoslavia, Croatia and Slovenia were the republics within Yugoslavia with the highest GDP per inhabitant. Nevertheless, hundreds of thousands of people left Croatia in the 1960s and 1970s to seek their fortune as guest workers in Western Europe or North America. With the freedom to travel, which is unusually liberal for socialist countries, Yugoslavia "exported" its unemployment and gained a rich source of foreign currency . In Croatia, at the end of the 1980s, when efforts to achieve state independence were accelerated, it is estimated that around 25 percent of the country's gross domestic product was generated. The Croatian economy was structurally relatively balanced, but recorded a collapse in production even before the war began (mid-1991). In 1990, 500 state-owned companies went bankrupt, and in 1991 production fell by 12 percent in the first quarter compared to the previous year. In 1990 gross domestic product (GDP) was US $ 5,205 per capita; Croatia was thus far above the average of the individual Yugoslav republics. After Croatia's independence , the economy was privatized and reoriented towards the Western European market. However, privatization began at the same time that the Croatian War broke out. Before the war, Croatia had the second highest economic output in terms of the share of Yugoslav GDP and was also in second place of the Yugoslav republics in terms of GDP per inhabitant.

The fighting continued in 1992 and escalated in January 1993 when Croatian troops attempted to recapture areas occupied by the Serbs. At the end of 1993, the economy began to gradually recover. The Republic joined the International Monetary Fund in January and the International Bank for Reconstruction and Development (World Bank) in April. By the end of the year, the government had accumulated US $ 1.5 billion in foreign currency reserves and had privatized most of the country's operations as part of an economic reform program. After the drought of 1992 it was possible to increase agricultural production by 20 percent. The damage caused by the acts of war, as well as lost revenue, is estimated to amount to over 50 billion US dollars. By 1992 GDP had almost halved, but then rose again.

The economic consequences of this war were lasting, on the one hand through direct destruction of industrial plants and on the other hand through

  • Loss of sales markets ,
  • the absence of tourists for several years,
  • immense costs of housing and caring for hundreds of thousands of internally displaced and displaced persons from Bosnia-Herzegovina : The cost of accepting more than 630,000 refugees at the end of 1992 was around 50 million US dollars per month. This corresponded to about a fifth of total government spending.
  • the high cost of rebuilding.

General data

The gross domestic product in 2011 was 14,457 euros per capita. Compared with the GDP of the EU expressed in purchasing power standards Croatia achieved an index of 64 (EU-27: 100) (2009). The national debt in 2009 was $ 38.1 billion, or 61.0% of GDP. According to forecasts, GDP growth in 2007 was around 6%. Net income rose by 6.2 percent in 2006 (average net income in November 2006: 4,995 kuna = approx. € 700; 2008: € 730). Unemployment was around 15 percent in 2012.

The Croatian economy went through a difficult process of transformation from the former socialist economic form of workers' self-management to a market economy.

The gross domestic product (GDP) in 2006 was 39,610 million US dollars (services 61.6 percent, industry 30.1 percent, agriculture 8.2 percent); this resulted in a GDP per inhabitant of 9,845 US dollars and a growth rate of around 4–6 percent (2007–2012). The national debt was $ 29,662 million. The inflation rate reached a value of 3.1 percent (2007). 14 percent of the workforce was employed in agriculture, 28 percent in industry and 58 percent in the service sector.

By sector 59% are in economic output in services , 32% to the industry , and 9% to the agriculture . The main economic activities are the service sectors , the manufacturing industry , the shipbuilding and tourism , which mainly affects the Adriatic coast and the numerous islands.

The production of wine has a high place on the Croatian export list. Due to Croatia's obligation to allow the duty-free import of highly subsidized and therefore cheaper agricultural products from the EU, agriculture is in crisis.

Croatia's biggest problem is its foreign trade balance : exports rose by around ten percent in 2005, but imports rose even more, namely by 13 percent. The trade deficit continued to rise. Economists are also not overly optimistic about the near future, because the majority of imports are consumer goods - many of which are not produced in the country.

In addition to Mercator (Slovenian), Spar (Dutch), Lidl (German), dm Drogeriemarkt (German), Kaufland (German), Mercatone (Italian), Billa (German-Austrian) and Metro (German), more and more foreign retail chains are settling in Croatia. The largest local retail chain is Konzum (part of the Agrokor group).

Shipbuilding also makes an important contribution to Croatia's economic output . The Croatian shipyards have a long tradition, are known for their good quality and are highly regarded all over the world. The Croatian shipbuilding industry ranks 2nd in Europe and 5th in the world in terms of the number of orders. The largest Croatian shipyard 3. maj is located in Rijeka (including tank construction). Other important shipyards are Viktor Lenac in Martinšćica (near Rijeka), Uljanik in Pula , the Kraljevica shipyard , Brodosplit and Brodotrogir .

The high level of debt of the Croatian population, which currently amounts to 33.9% of GDP (cf. average in the new EU states: 16%), is a very big problem . This means that the Croatian population is almost twice as indebted as the population in the other new EU states. The budget deficit of around three percent drove the debt ratio up in 2005: As a result, national debt rose above the 50 percent mark of GDP.

Austria is by far the largest foreign investor in Croatia. According to official data, Austrians hold a majority in 390 Croatian companies. Unofficially, the number is assumed to be twice as high.

Current changes

In recent years, cities and municipalities have set up numerous special free trade zones or business zones in Croatia , which are subsidized by the government and offer domestic and foreign companies and investors special location advantages (complete infrastructure) and tax breaks . Some of the capacity in such zones is already exhausted, which is a visible sign of the success of this strategy . New industrial areas of this type are constantly being added, especially in the vicinity of newly built motorway sections.

In 2005 a service for entrepreneurs was presented by the government, which should make it much easier to set up a company in Croatia. Up until now, bureaucratic official channels can be dealt with via the Internet, and applications are guaranteed to be processed in the shortest possible time (so-called one-stop shop ). Opportunities for bribery and corruption can practically be ruled out. The government hopes to be able to contribute to stimulating economic growth through such services.

The land registry reform is also one of the more important priorities . In the course of 2006, the last parcels should also be available in electronic form on the Internet, which should also facilitate the selection of locations and business start-ups.

Since January 2006, it is possible in Croatia, the VAT return to perform the internet (ePDV). In the near future, it should also be possible to submit income tax returns via the Internet. As part of the e-Hrvatska project, the government announced that it would soon be possible to use the state financial services via mobile phone or mobile payment options (see m-parking in various Croatian cities). The e-tax accounting, including the possibility of an overview of all tax obligations, should also be introduced soon.

The judicial reform also belongs to the reduction of bureaucracy . From 2006 onwards, seizures (Austrian executions ) will also be carried out by public notaries in order to relieve the individual courts. (Up to now, companies have found it difficult to pursue insolvent customers because the courts were inundated with seizure applications.)

In the Global Entrepreneurship Monitor (GEM) in 2005, Croatia took 19th place out of 35 countries in the world and thus made a big leap forward (2002: 32nd place out of 37 countries). The GEM is an international project that has been carried out by the London Business School ( Great Britain ) and Babson College ( USA ) since 1999 . The report examines and analyzes entrepreneurial activity in comparison with selected countries. The GEM is an important instrument for the international comparison of the differences in the entrepreneurial activity of individual countries. Factors are identified on which entrepreneurial activities and economic policy measures to improve the entrepreneurial capacity of a state depend.

In the World Economic Forum's report on competitiveness, Croatia ranks 74th out of 137 worldwide.

The Lisbon Strategy of the European Union aims to make Europe the most competitive and dynamic, knowledge-based economic area in the world. In the 2006 World Economic Forum report , Croatia, as an EU candidate country, already performed better than Bulgaria and Romania , two countries that joined the EU in January 2007, in terms of economic competitiveness and other areas .

Croatia was admitted to the European Union on July 1, 2013.

Importance of selected economic sectors

Agriculture

In Croatia there is a lot of agriculture compared to Germany . Around two thirds of the area is used for agriculture. Above all, the fertile soils in the Sava- Drava river basin are used intensively. The main fruits grown are sugar beets, potatoes, wheat and corn. In climatically favorable locations, some special crops are also grown, especially grapes and fruit, as mentioned above. In southern Dalmatia , high yields are achieved even with tobacco and citrus fruits. Cattle, sheep and pig breeding dominate the livestock sector. In Dalmatia , fishing is an important source of income.

See also: Viticulture in Croatia

Mining

Croatia is relatively rich in natural resources. Before the outbreak of the Croatian War in 1991, the mining industry was one of the most important employers. Natural gas , crude oil , hard coal , lignite , bauxite , iron ore and china clay ( kaolin ) are among the most important raw materials in Croatia. In some regions there are also small deposits of calcium , natural asphalt , silica , mica and salt . In addition, graphite and building materials (especially concrete raw materials) are mined.

One of the shipyards in Croatia

Industry

The predominant industrial operations in Croatia are oil refineries , iron and steel works , shipyards , chemical companies and production facilities for food , machinery , cement and concrete , metal goods and textiles . The formerly important mining industry has been recording declines in production for several years. Many of Croatia's industrial plants were destroyed or damaged in the 1991 fighting. The reconstruction of the plants ties up a lot of financial resources and prevents further development in some other production areas. At the beginning of the clashes with the Serbs , industrial production fell by 42.5% in 1991. The Croatian economy started to grow in 1993, and by 1996 most branches of industry again saw significant increases in productivity.

currency

To combat galloping inflation, in May 1994 the kuna (Croatian for martens) (at 100 lipa) replaced the Croatian dinar ( which had replaced the Yugoslav dinar in December 1991 ) as the national currency of the republic. The name " Kuna " goes back to the local currency from the Middle Ages. At that time in the Croatian provinces Slavonia and the coastal region with marten skins traded.

Banking

Croatian National Bank in Zagreb

The banking system is consolidated and the largest banks in the country have merged with major Italian and Austrian banks or have been taken over by them. The largest banks in Croatia include Zagrebačka banka , Privredna banka , Erste & Steiermärkische bank , Raiffeisenbank Austria , Splitska banka , Hypo Alpe-Adria-Bank , Hrvatska poštanska banka and OTP banka Hrvatska .

tourism

see main article: Tourism in Croatia

Croatia is an attractive holiday destination. The main attractions are the coast , the national parks and the cities, with Split , Dubrovnik , Rijeka and Zagreb being particularly popular . Over ten million tourists visit Croatia every year. The trend has been increasing for years.

retail trade

In addition to Mercator (Slovenian), Spar (Austrian), Lidl (German), dm-drogerie markt (German), Kaufland (German), Mercatone (Italian), Billa (Austrian), Bauhaus (German), baumax (Austrian), kika (Austrian), Ikea (Swedish), Obi (German) and Metro (German) more and more foreign retail chains are settling in Croatia. The retail chain Aldi (German) is also in the process of opening up the market in Croatia . The largest local retail chain is Konzum (part of the Agrokor group).

Economic data

development

All GDP values ​​are given in US dollars.

year 1993 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GDP
(purchasing power parity) 		36.02 billion 42.41 billion 54.51 billion 76.28 billion 82.38 billion 88.94 billion 92.54 billion 86.36 billion 86.17 billion 87.66 billion 87.28 billion 88.11 billion 89.61 billion 92.71 billion 96.86 billion 101.34 billion
GDP per capita
(purchasing power parity) 		7,790 9,524 12,441 17.173 18,556 20,049 20,872 19,499 19,505 20,483 20,450 20,703 21,144 22,052 23,227 24,424
GDP growth
(real) 		−8.0% 6.6% 3.8% 4.2% 4.8% 5.2% 2.1% −7.4% −1.4% −0.3% −2.2% −0.6% −0.1% 2.3% 3.2% 2.8%
Inflation
(in percent) 		1,518.5% 2.0% 4.6% 3.3% 3.2% 2.9% 6.1% 2.4% 1.0% 2.3% 3.4% 2.2% −0.2% −0.5% −1.1% 1.1%
Unemployment
(in percent) 		14.8% 14.5% 20.6% 17.6% 16.5% 14.7% 13.0% 14.5% 17.2% 17.4% 18.6% 19.8% 19.3% 17.1% 14.8% 12.2%
Public debt
(as a percentage of GDP) 		... ... 33% 41% 39% 38% 40% 49% 58% 65% 71% 82% 86% 85% 83% 78%

Investments

For some time now, Croatia has seen growing impulses in the area of ​​domestic investment. These are mainly due to:

Croatian foreign investment (2005, preliminary results):

In 2005, Croatian companies invested a total of around EUR 95 million abroad.

  1. Hungary (17%)
  2. Bosnia and Herzegovina (17.6%)
  3. Netherlands (14.7%)
  4. Serbia and Montenegro (12.2%)
  5. Liberia (11.8%)
  6. British Virgin Islands (9.7%)

Foreign direct investment

The main investor countries from which direct investments ( FDI ) arrive in Croatia (preliminary status: 2005):

  1. Austria (25.6%)
  2. Hungary (21.7%)
  3. Germany (13.2%)
  4. Italy (9.4%)

In total, direct investments in the first nine months of 2005 amounted to 1.24 billion euros. Around half (49.9 percent) of investments in 2005 went into the banking sector, 10.9 percent into the exploration of oil and gas, 9.3 percent into retail and 9.2 percent into the hospitality and hotel industries .

Foreign trade

The main export products of Croatia are machine and transport accessories, clothing and chemicals. The export of Croatia in 2003 (estimated) was 6,355 million US dollars fob .

Export statistics: (data from 2002)

  1. Italy (22.4%)
  2. Bosnia and Herzegovina (14.4%)
  3. Germany (12.5%)
  4. Slovenia (8%)
  5. Austria (7.3%)

Imports mainly come from: (data from 2002)

  1. Italy (16.8%)
  2. Germany (16.4%)
  3. Slovenia (7.8%)
  4. Russia (6.8%)
  5. Austria (6.7%)
  6. France (5.2%)

Croatia has had duty-free access to EU markets since 2002 , and the same applies to imports from the EU.

The rapprochement with the EU and the Stabilization and Association Agreement implemented in February 2005 are expected to provide important economic impetus for the country, both in terms of import and export trade. Croatia is currently suffering from a large export deficit. The complete liberalization of the market should entail further investments, in particular so-called “ greenfield ” investments are hoped for.

The largest Croatian companies

The table shows the 10 largest Croatian companies, sorted by turnover, as of 2009

space Companies Sales
(€ million)
1 Agrokor dd (food company) 3,607
2 INA dd (mineral oil industry) 2,776
3 HEP dd (electricity supplier) 1,626
4th T-Hrvatski Telecom 1,160
5 Zagrebački Holding (City of Zagreb) 602
6th VIPnet (cellular network) 492
7th Podravka (food company) 489
8th HT Holding 470
9 Pliva (pharmaceutical industry) 393
10 Vindija (food company) 386.5
10 Adris Grupa dd (tobacco industry) 386.5

see also : List of the largest companies in Croatia

literature

  • Wolfgang Tiede / Christine Simon: Foreign investments and company formation in Croatia. ( Foreign investments and business start-ups in Croatia ) In: Jahrbuch für Ostrecht 2010, Volume 51, pp. 11–37.

swell

  1. ↑ Croatian Kuna Exchange Rates.Retrieved October 16, 2010
  2. ↑ a b Data from the International Monetary Fund: World Economic Outlook Database , as of October 2014. Accessed November 26, 2014.
  3. ↑ a b IMF - World Economic Outlook Database, October 2012
  4. ↑ Eurostat - Gross Value Added in Agriculture.Retrieved October 16, 2010
  5. ↑ Eurostat - Gross Value Added Industry. Accessed October 16, 2010
  6. ↑ Eurostat - Gross Value Added Services Accessed on October 16, 2010
  7. ↑ Eurostat - Employment. Accessed 16 October 2010
  8. ↑ Stopa nezaposlenosti , Croatian State Statistical Office , dzs.hr, accessed on September 22, 2019
  9. ↑ a b c d e f CroStat - Statistical Yearbook 2009 (PDF file; 335 kB) Retrieved on October 16, 2010
  10. ↑ Eurostat - Public debt. Accessed 16 October 2010
  11. ↑ Eurostat - Government deficit.Retrieved October 16, 2010
  12. ↑ Tobias Pflüger , Martin Jung: War in Yugoslavia. 2nd Edition. 1994, ISBN 3-9803269-3-4 , p. 29.
  13. ↑ according to GDP / inhabitant, according to Der Fischer Weltalmanach. 1989, ISBN 3-596-19090-8 .
  14. ↑ see also Hitro.hr ( Memento of the original from June 15, 2006 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.hitro.hr
  15. ↑ ePDV ( Memento of the original dated June 16, 2006 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.  @1@ 2Template: Webachiv / IABot / www.pu.mfin.hr
  16. ↑ The Global Competitiveness Report 2017–2018. World Economic Forum, September 26, 2017, accessed November 28, 2017 .
  17. ↑ World Economic Forum, Lisbon Review 2006 ( Memento of the original dated November 26, 2006 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.  @1@ 2Template: Webachiv / IABot / www.weforum.org
  18. ↑ Reuters.de, Lisbon Strategy, Report 2006  ( page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.@1@ 2Template: Toter Link / de.today.reuters.com  
  19. ↑ Djekovic-Sachs, Ljiljana: The successor states of Yugoslavia between stabilization and collapse. In: Südosteuropa-Mitteilungen , Volume 33 (1993), p. 28
  20. ^ Report for Selected Countries and Subjects. Retrieved September 7, 2018 (American English).
  21. ↑ List of the 100 largest companies in the former Yugoslavia (PDF)

Web links