The economy of Croatia is a developing high-income service-based economy with the tertiary sector accounting for 60% of total gross domestic product (GDP).
The Croatian economy was badly affected by the financial crisis which, together with slow progress of economic reforms, resulted in six years of recession and a cumulative decline in GDP of 12.5%. Croatia formally emerged from the recession in the fourth quarter of 2014 and had a continuous GDP growth since.
The Croatian economy reached pre crisis levels in 2019, but due to the Coronavirus pandemic its GDP had decreased by 8.4% in 2020, growth picked up in 2021 when Croatia recorded biggest GDP growth since 1991.
However, Croatia bounced back supported by strong private consumption, the better-than-expected performance of tourism industry and the boom merchandise exports, that in the first nine months of 2021 amounted to 13.3 billion euros, an annual increase of 24.6 per cent. This made 2021 Croatian export’s record year as the score from 2019 was exceeded by 2 billion euros.
Tourism is one of the main pillars of the Croatian economy, comprising 19.6% of Croatia’s GDP. Croatia is working to become an energy powerhouse with its floating liquefied natural gas (LNG) regasification terminal on the island of Krk and investments in green energy, particularly wind energy, solar and geothermal energy, having opened 17 MW Velika 1 geothermal power plant in Ciglena in late 2019, that is the largest power plant in continental Europe with binary technology and starting the work on the second one in the summer of 2021.
The government intends to spend about $1.4 billion on grid modernization, with a goal of increasing renewable energy source connections by at least 800 MW by 2026 and 2,500 MW by 2030 and predicts that renewable energy resources as a share of total energy consumption will grow to 36.4% in 2030, and to 65.6% in 2050.
In 2021, Croatia joined the list of countries with its own automobile industry, with Rimac Automobili’s Nevera started being produced. The company also took over Bugatti Automobiles in November same year and started building its new HQ in Zagreb, titled as the ‘Rimac Campus’, that will serve as the company’s international research and development (R&D) and production base for all future Rimac products, as well as home of R&D for future Bugatti models.
The company also plans to build battery systems for different manufacturers from the automotive industry.
The state controls a part of the economy, with substantial government expenditure. The European Union is Croatia’s most important trading partner. Croatia provides social security, universal health care, and tuition-free primary and secondary education while supporting culture through public institutions and corporate investments in media and publishing.
Croatia joined the World Trade Organization in 2000, NATO in 2009 and became a member of the European Union on 1 July 2013.
Small and medium sized enterprises (SMEs) account for about 99% of all enterprises in Croatia, In 2020, Croatian SMEs accounted for 63.7% of value added and 67.4% of employment in the ‘non-financial business economy’.
Croatian SMEs employ an average of 4.8 people, surpassing the EU average of 3.9. However, the average productivity of Croatian SMEs, defined as value added per person employed, is €20,800, less than half the EU average of €44,600.
The country is among the best performing EU Member States in internationalization activities. As reported by the Flash Eurobarometer 2020, 39% of Croatian SMEs export to other EU countries, which is significantly higher than the EU average of 23%.
The country lags behind the EU average on business digitalization. Croatia scored below or close to the EU average in all six components of the Digital Economy and Society Index in 2020. Croatian SMEs also lack sufficient ICT specialists.
On the sustainability measures taken by SMEs, Croatian businesses perform below the EU average in all eight categories of the Flash Eurobarometer on SMEs.
Croatia (the Republic of Croatia)
Croatian kuna (HRK)
Central European Time (GMT+2)
1 January – 31 December (calendar year)
National Minimum Wage:
€623.7 per month
Taxpayer Identification Numbers:
Personal Identification Number (OIB, “osobni identifikacijski broj”)
VAT ID Number
Main trading partners:
Germany, Italy, Slovenia, Bosnia and Herzegovina, Hungary, and Austria.