Brief Economic History and Trends [RF 5]
Following World War II, rapid industrialization and diversification occurred. Decentralization came in 1965, allowing growth for the economy, particularly the tourist industry. "Profits from Croatian industry were used to develop poorer regions in the former Yugoslavia. This, coupled with austerity programs and hyperinflation in the 1980s, contributed to discontent in Croatia."
As a result of the war in 1991, the economic infrastructure caved, the heavies hit being the tourism industry. From 1989 to 1993, GDP fell 40.5%. "With the end of the war in 1995, tourism and Croatia's economy recovered moderately. However, corruption, cronyism, and a general lack of transparency stymied meaningful economic reform, as well as much-needed foreign investment."
As of October 2011, there were signs of progress in this area, but the process had not yet been finalized."Croatia's economy grew strongly in the 2000s, stimulated by a credit boom led by newly privatized and foreign-capitalized banks, some capital investment (most importantly road construction), further growth in tourism, and gains by small- and medium-sized private enterprises. One downside to these steadily improving trends was a strong growth in Croatia’s stock of foreign debt, which by 2010 had reached almost 100% of GDP."
"Croatia’s economy was greatly affected by the global financial crisis, and has recovered more slowly than many of its neighbors. "The country experienced a drop from 2.4% GDP growth in 2008 to a 5.8% contraction in 2009. GDP fell a further 1.2% in 2010 (about $62.25 billion), while 2011 saw approximately 0.7% growth. Official unemployment is 17.9%." Croatia's high foreign debt present long-term risks to its economic well-being, as continued access to foreign credit may be severely limited. An inefficient bureaucracy, relatively high labor costs, and lack of transparency in taxes, fees, and the public tender process have all led to a generally unfavorable climate for foreign investment. The new government intends to eliminate certain non-tax fees on business, consolidate overlapping government agencies, and identify administrative barriers to foreign investment. Improvements to Croatia’s judicial system are not yet fully achieved, another hindrance to economic development."
As a result of the war in 1991, the economic infrastructure caved, the heavies hit being the tourism industry. From 1989 to 1993, GDP fell 40.5%. "With the end of the war in 1995, tourism and Croatia's economy recovered moderately. However, corruption, cronyism, and a general lack of transparency stymied meaningful economic reform, as well as much-needed foreign investment."
As of October 2011, there were signs of progress in this area, but the process had not yet been finalized."Croatia's economy grew strongly in the 2000s, stimulated by a credit boom led by newly privatized and foreign-capitalized banks, some capital investment (most importantly road construction), further growth in tourism, and gains by small- and medium-sized private enterprises. One downside to these steadily improving trends was a strong growth in Croatia’s stock of foreign debt, which by 2010 had reached almost 100% of GDP."
"Croatia’s economy was greatly affected by the global financial crisis, and has recovered more slowly than many of its neighbors. "The country experienced a drop from 2.4% GDP growth in 2008 to a 5.8% contraction in 2009. GDP fell a further 1.2% in 2010 (about $62.25 billion), while 2011 saw approximately 0.7% growth. Official unemployment is 17.9%." Croatia's high foreign debt present long-term risks to its economic well-being, as continued access to foreign credit may be severely limited. An inefficient bureaucracy, relatively high labor costs, and lack of transparency in taxes, fees, and the public tender process have all led to a generally unfavorable climate for foreign investment. The new government intends to eliminate certain non-tax fees on business, consolidate overlapping government agencies, and identify administrative barriers to foreign investment. Improvements to Croatia’s judicial system are not yet fully achieved, another hindrance to economic development."