MACROECONOMICS - CROATIA

Knowledge about Croatian macroeconomics

can help you make an informed decision

before purchasing property in Croatia

MACROECONOMICS - CROATIA

Knowledge about Croatian macroeconomics

can help you make an informed decision

before purchasing property in Croatia

A Country in Growth

Despite some turbulent years in the late 1980s and early 1990s, Croatia is now a developing high-income service based economy, and also one of the strongest economies in Southeast Europe.

Croatia is still subject to the economic and social consequences of the coronavirus, but the country’s economy has been in progress since 2015. The positive development has been due to several factors, including their entry in the EU in 2013, but also the country’s ability to reduce the unemployment drastically since it spiked in 2014. The economic progress is also reflected in the wages and the consumption, which has been rising steadily since 20151.

Despite some turbulent years in the late 1980s and early 1990s, Croatia is now a developing high-income service based economy, and also one of the strongest economies in Southeast Europe.

Croatia is still subject to the economic and social consequences of the coronavirus, but the country’s economy has been in progress since 2015. The positive development has been due to several factors, including their entry in the EU in 2013, but also the country’s ability to reduce the unemployment drastically since it spiked in 2014. The economic progress is also reflected in the wages and the consumption, which has been rising steadily since 20151.

Recent Economic Crisis

Apart from the collapse of socialism and the Croatian War of Independence in the late 1980s and early 1990s, the Croatian economy has had two major declines in recent years: 1) the financial crisis in 2007 – 2008, and 2) the Coronavirus pandemic in 2020.

The Croatian economy was heavily affected by the financial crisis which, in combination with slow progress of economic reforms, resulted in 6 years of recession and a cumulative decline in GDP of 12.5%. Croatia officially emerged from the recession in the fourth quarter of 2014, and has had a continuous GDP growth since. The Croatian economy reached pre crisis levels in 2019, and is currently at its highest level ever.

Recovery has begun and the economic forecasts are looking positive.

Recent Economic Crisis

Apart from the collapse of socialism and the Croatian War of Independence in the late 1980s and early 1990s, the Croatian economy has had two major declines in recent years: 1) the financial crisis in 2007 – 2008, and 2) the Coronavirus pandemic in 2020.

The Croatian economy was heavily affected by the financial crisis which, in combination with slow progress of economic reforms, resulted in 6 years of recession and a cumulative decline in GDP of 12.5%. Croatia officially emerged from the recession in the fourth quarter of 2014, and has had a continuous GDP growth since. The Croatian economy reached pre crisis levels in 2019, and is currently at its highest level ever.

Recovery has begun and the economic forecasts are looking positive.

Most Important Economic Sectors

Croatia’s economy is dominated by three main sectors: The industrial sector, Trade and Tourism.

The industrial sector exports over €10,000,000,000 annually and is dominated by shipbuilding. The industrial sector represents 27% of Croatia’s total economic output, while agriculture represents 6%. The industrial sector is responsible for 25% of Croatia’s GDP, with agriculture, forestry and fishing accounting for the remaining 5% of Croatian GDP.

Trade also plays a major role in the Croatian economic output. According to Healy Consultants, trade in Croatia is bolstered by its low trade-weighted average tariff of just 1.2%3.

Tourism in Croatia is a major part of the country’s economy, accounting for almost 20% of gross domestic product (GDP). The majority of tourist arrivals are recorded in the summer months, but in recent years, tourism during the winter months has seen growth, due to an increase in popularity of snow sports, such as skiing. Today, Croatia is one of the most visited tourist destinations in the Mediterranean, with a total of 19.6 million tourists visiting in 20194. Croatia is also ranked among the top 20 most popular tourist destinations in the world, and was voted as the world’s top tourism destination in 2005 by Lonely Planet.

Tourist Arrivals in Croatia


Most Important Economic Sectors

Croatia’s economy is dominated by three main sectors: The industrial sector, Trade and Tourism.

The industrial sector exports over €10,000,000,000 annually and is dominated by shipbuilding. The industrial sector represents 27% of Croatia’s total economic output, while agriculture represents 6%. The industrial sector is responsible for 25% of Croatia’s GDP, with agriculture, forestry and fishing accounting for the remaining 5% of Croatian GDP.

Trade also plays a major role in the Croatian economic output. According to Healy Consultants, trade in Croatia is bolstered by its low trade-weighted average tariff of just 1.2%3.

Tourism in Croatia is a major part of the country’s economy, accounting for almost 20% of gross domestic product (GDP). The majority of tourist arrivals are recorded in the summer months, but in recent years, tourism during the winter months has seen growth, due to an increase in popularity of snow sports, such as skiing. Today, Croatia is one of the most visited tourist destinations in the Mediterranean, with a total of 19.6 million tourists visiting in 20194. Croatia is also ranked among the top 20 most popular tourist destinations in the world, and was voted as the world’s top tourism destination in 2005 by Lonely Planet.

Tourist Arrivals in Croatia


Economic Key Figures

GDP per capita - Croatia

Unemployment - Croatia

Wages - Croatia

Consumer Spending - Croatia

Economic Key Figures

GDP per capita - Croatia

Unemployment - Croatia

Wages - Croatia

Consumer Spending - Croatia

Real estate prices on the rise

Even though the positive trend of rising real estate prices in Croatia was temporarily abrupted by Covid-19 in 2020, the Croatian real estate prices continue to rise.

The highest square-meter asking prices in Croatia are in Dubrovnik, Split and Zagreb. In recent years the largest price increases on housing were recorded in the counties Split-Dalmatia and Istria.

The price increases on housing are mainly caused by a high demand combined with very limited supply, but are also supported by the country’s economic growth and its increasing popularity as a tourist destination.

Housing Index - Croatia

Real estate prices on the rise

Even though the positive trend of rising real estate prices in Croatia was temporarily abrupted by Covid-19 in 2020, the Croatian real estate prices continue to rise.

The highest square-meter asking prices in Croatia are in Dubrovnik, Split and Zagreb. In recent years the largest price increases on housing were recorded in the counties Split-Dalmatia and Istria.

The price increases on housing are mainly caused by a high demand combined with very limited supply, but are also supported by the country’s economic growth and its increasing popularity as a tourist destination.

Housing Index - Croatia

Construction output is increasing

Croatia’s construction output has been increasing for approximately 10 years.

The latest statistics from Croatia show an increase of 10.8% (y/y) in August 2020. The increased construction output is directly related to the positive development in the country’s economy.

Although the disruptions caused by the COVID-19 outbreak and the subsequent lockdown measures have affected the industry, construction activity in Croatia has not been as severely affected as major markets across the region. The current supply chain crisis might affect the country’s construction sector in a near future.

Construction - Croatia

Construction output is increasing

Croatia’s construction output has been increasing for approximately 10 years.

The latest statistics from Croatia show an increase of 10.8% (y/y) in August 2020. The increased construction output is directly related to the positive development in the country’s economy.

Although the disruptions caused by the COVID-19 outbreak and the subsequent lockdown measures have affected the industry, construction activity in Croatia has not been as severely affected as major markets across the region. The current supply chain crisis might affect the country’s construction sector in a near future.

Construction - Croatia

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