Croatia Economy

Economy

Before the dissolution of Yugoslavia, the Republic of Croatia, after Slovenia, was the most prosperous and industrialized area, with a per capita output perhaps one-third above the Yugoslav average. The economy emerged from a mild recession in 2000 with tourism, banking, and public investments leading the way. Unemployment remains high, at about 14 percent, with structural factors slowing its decline. While macroeconomic stabilization has largely been achieved, structural reforms lag because of deep resistance on the part of the public and lack of strong support from politicians. Growth, while impressively about 4% for the last several years, has been achieved through high fiscal and current account deficits. The government is gradually reducing a heavy back log of civil cases, many involving land tenure. The EU accession process should accelerate fiscal and structural reform.