Croatia Economy

The Croatian economy has a stable functioning market economy. International Monetary Fund data shows that Croatian nominal GDP stood at $50.053 billion, or $11,271 per capita, in 2007. The IMF forecast for 2008 is $54.950 billion, or $13,553 per capita. In purchasing power parity terms, total GDP was $69.866 billion in 2007, equivalent to $15,733 per capita. For 2008, it is forecast to be $74.419 billion, or $16,758 per capita.

According to Eurostat data, Croatian PPS GDP per capita stood at 57.5 per cent of the EU average in 2007, and is forecast to reach 57.8 per cent in 2008. Real GDP growth in 2007 was 6.0 per cent. The average gross salary of a Croat during the first nine months of 2008 was 7,161 kuna (US$ 1,530) per month In 2007, the International Labour Organization-defined unemployment rate stood at 9.1 per cent, after falling steadily from 14.7 percent in 2002. The registered unemployment rate is higher, though, standing at 13.7 percent in December 2008.

In 2007, 7.2 percent of economic output was accounted for by agriculture, 32.8 percent by industry and 60.7 percent by the service sector. According to 2004 data, 2.7 percent of the workforce were employed in agriculture, 32.8 percent by industry and 64.5 in services.

The industrial sector is dominated by shipbuilding, food processing and the chemical industry. Tourism is a notable source of income during the summer, with over 11 million foreign tourists in 2008 generating a revenue of €8 billion. Croatia is ranked as the 18th most popular tourist destination in the world. In 2006 Croatia exported goods to the value of $10.4 billion (FOB) ($19.7 billion including service exports).

Of particular concern is the backlogged judiciary system, combined with inefficient public administration, especially issues of land ownership and corruption. Another main problem includes the large and growing national debt which has reached over 34 billion euro or 89.1 per cent of the nations gross domestic product. Because of these problems, studies show that the population of Croatia generally has negative expectations of the country's economic future.

The country has been preparing for membership in the European Union, its most important trading partner. In February 2005, the Stabilisation and Association Agreement with the EU officially came into force.