Today, we will delve into the intricacies of the Croatian economy, exploring its key features, challenges, and notable developments.
Is Croatia a rich or Poor Country?
With a GDP amounting to $69 billion, Croatia earns its place on the list of European countries ranked by GDP per capita (PPP) from richest to poorest. Croatia's GDP per capita stands at $17,000.
Is Croatia's economy affected by the Russia-Ukraine war?
Yes, Croatia's economy is indeed affected by the Russia-Ukraine war. The imposition of economic sanctions on Russia, due to its aggression in Ukraine, has led to various challenges for Croatia. The country is grappling with increased prices of essential commodities such as oil, gas, and food, primarily because of disruptions in the supply chains and a reduction in imports from Russia. The government has implemented measures to alleviate the situation, including regulating margin squeezes and tax excise reductions. However, the international nature of commodity prices means that the government's influence is limited.
Additionally, some Croatian companies are facing significant challenges. For instance, pharmaceutical producer Jadran Galenski Laboratorij (JGL) has experienced a halt in trade with Ukraine, and companies like Petrokemija and Fortenova Grupa are affected due to their connections with Russian banks. Đuro Đaković TEP, a company entirely owned by Russians, is seeking exemptions from sanctions to protect its employees and future operations.
The negative impact extends beyond commodity prices, affecting disposable incomes, economic activity, consumption, and investments. The uncertainty surrounding the future, particularly for those employed by companies connected to Russian capital, adds to the overall economic anxiety. The situation emphasizes the need for economic diversification and reduced dependence on specific countries, urging governments to work towards economic independence and explore alternative sources for energy and trade.
Additionally, some Croatian companies are facing significant challenges. For instance, pharmaceutical producer Jadran Galenski Laboratorij (JGL) has experienced a halt in trade with Ukraine, and companies like Petrokemija and Fortenova Grupa are affected due to their connections with Russian banks. Đuro Đaković TEP, a company entirely owned by Russians, is seeking exemptions from sanctions to protect its employees and future operations.
The negative impact extends beyond commodity prices, affecting disposable incomes, economic activity, consumption, and investments. The uncertainty surrounding the future, particularly for those employed by companies connected to Russian capital, adds to the overall economic anxiety. The situation emphasizes the need for economic diversification and reduced dependence on specific countries, urging governments to work towards economic independence and explore alternative sources for energy and trade.
Economy of Croatia as of 2023
The European Commission has revised its growth forecast for Croatia's economy in 2023, increasing it from the previously projected 1.6% to a more optimistic 2.6%, according to the Autumn 2023 Economic Forecast. The positive outlook is attributed to Croatia's accession to the euro and Schengen areas, coupled with a carry-over effect from the previous year, despite a somewhat subdued external environment. Strong consumer demand is expected to persist, supported by employment and real wage growth. The forecast also anticipates positive contributions from government consumption and investment, particularly driven by increased absorption of EU funds. However, a slowdown in inventory build-up is predicted to exert downward pressure on domestic demand. Net exports are projected to make a positive contribution, with a decrease in goods imports outweighing lower goods exports. Additionally, a reversal of the terms-of-trade shock suffered in 2022 is anticipated, leading to an improvement in the trade balance throughout the year.
Economy of Croatia main sectors
Croatia's gross domestic product (GDP) composition reveals that agriculture constitutes 2.48 percent, industry contributes approximately 19.51 percent, and the services sector plays a substantial role, accounting for about 61.31 percent.
Economy of Croatia main sectors is it tourism?
Croatia boasts a fully integrated and globally connected economy, with its journey towards globalization commencing shortly after gaining independence. A key pillar of Croatia's economy is tourism, which heavily relies on the global market for its success.
How the Croatian economy affects foreigners?
The Croatian economy can have diverse impacts on foreigners depending on their interactions and involvement in the country. Primarily, as a significant tourist destination, Croatia attracts numerous foreign visitors. The state of the economy directly influences the tourism industry, affecting foreign tourists through changes in prices, service availability, and quality.
For foreigners seeking employment in Croatia, the condition of the economy plays a crucial role. Economic growth may lead to increased job opportunities, while economic downturns might result in a more competitive job market.
Additionally, for foreign investors, monitoring the Croatian economy is essential for identifying potential investment opportunities. Economic stability, government policies, and overall growth can impact Croatia's attractiveness as a destination for foreign investments.
For foreigners seeking employment in Croatia, the condition of the economy plays a crucial role. Economic growth may lead to increased job opportunities, while economic downturns might result in a more competitive job market.
Additionally, for foreign investors, monitoring the Croatian economy is essential for identifying potential investment opportunities. Economic stability, government policies, and overall growth can impact Croatia's attractiveness as a destination for foreign investments.
Croatia vs Serbia economy
Experience a significantly lower top tax rate in Croatia, where the current highest tax rate stands at 47.2% as of 2016. In contrast, Serbia boasts a considerably reduced top tax rate of 15.0% as of 2017.
Witness a 31.3% reduction in income, considering Croatia's GDP per capita of $26,500 as of 2020, compared to Serbia's GDP per capita of $18,200 in the same year.
Face a 74.7% higher likelihood of unemployment in Serbia, where the unemployment rate among adults reaches 14.1% as of 2017, compared to Croatia's lower rate of 8.1% in 2019.
Encounter a 26.8% higher probability of living below the poverty line in Serbia, where 23.2% of the population is below the poverty line as of 2018, as opposed to Croatia's rate of 18.3% in the same year.
Witness a 31.3% reduction in income, considering Croatia's GDP per capita of $26,500 as of 2020, compared to Serbia's GDP per capita of $18,200 in the same year.
Face a 74.7% higher likelihood of unemployment in Serbia, where the unemployment rate among adults reaches 14.1% as of 2017, compared to Croatia's lower rate of 8.1% in 2019.
Encounter a 26.8% higher probability of living below the poverty line in Serbia, where 23.2% of the population is below the poverty line as of 2018, as opposed to Croatia's rate of 18.3% in the same year.
Poland vs Croatia economy
Experience a 17.7% decrease in income, considering Poland's GDP per capita of $32,200 as of 2020, compared to Croatia's GDP per capita of $26,500 in the same year.
Face a 48.6% higher likelihood of unemployment in Croatia, where the unemployment rate among adults is 8.1% as of 2019, compared to Poland's lower rate of 5.4% in the same year.
Encounter an 18.8% higher probability of living below the poverty line in Croatia, where 18.3% of the population is below the poverty line as of 2018, as opposed to Poland's rate of 15.4% in the same year.
Bear a 47.5% higher top tax rate in Croatia, with the current highest tax rate standing at 47.2% as of 2016. In contrast, Poland maintains a relatively lower top tax rate of 32.0% as of 2016.
Face a 48.6% higher likelihood of unemployment in Croatia, where the unemployment rate among adults is 8.1% as of 2019, compared to Poland's lower rate of 5.4% in the same year.
Encounter an 18.8% higher probability of living below the poverty line in Croatia, where 18.3% of the population is below the poverty line as of 2018, as opposed to Poland's rate of 15.4% in the same year.
Bear a 47.5% higher top tax rate in Croatia, with the current highest tax rate standing at 47.2% as of 2016. In contrast, Poland maintains a relatively lower top tax rate of 32.0% as of 2016.
Turkey vs Croatia economy
Croatia and Turkey exhibit differences across various economic indicators:
- Currency: Croatia uses the euro (1 EUR = 100 Cent), while Turkey employs the Turkish lira (1 TRY = 100 Kurus).
- Unemployment Rate: Croatia has a lower unemployment rate at 6.8%, compared to Turkey's rate of 10.0%.
- Inflation Rate: Croatia experiences a lower inflation rate at 10.78%, while Turkey faces a higher rate of 72.31%.
- Cost of Living: The cost of living in Croatia is 54.57% of the United States baseline, whereas Turkey's cost of living is 30.38%.
- Commercial Taxes and Contributions: Croatia has a lower commercial tax and contribution rate at 20.50%, in contrast to Turkey's higher rate of 42.30%.
- Average Income: Croatia's average income is higher at 19,470 US dollars compared to Turkey's average income of 10,590 US dollars.
- Central Government Debt (% of GDP): Croatia carries a higher central government debt as a percentage of GDP, standing at 66.69%, whereas Turkey's central government debt is lower at 26.88%.
- General Government Debt (% of GDP): Croatia again exhibits a higher general government debt at 67.54%, while Turkey's general government debt is at 31.18%.
- Corruption Index: Croatia has a lower corruption index of 50 (considered bad), while Turkey's index is 64 (also considered bad).
