Editing Economy of Croatia (section)

==History==

===Pre-20th century ===
[[File:Viktor Kovačić- Palača Burze, Trg Burze, Zagreb, 1922- 1927.jpg|thumb|left|[[Zagreb]] [[Zagreb Stock Exchange|Stock Exchange Palace]] in 1927]]
[[File:Rijeka oil refinery around 1930.jpg|thumb|left|[[Oil refinery]] in [[Rijeka]] in the 1930s]]
When Croatia was still part of the [[The Dual monarchy|Dual Monarchy]], its economy was largely agricultural. However, modern industrial companies were also located in the vicinity of the larger cities. The [[Kingdom of Croatia (Habsburg)|Kingdom of Croatia]] had a high ratio of population working in agriculture. Many industrial branches developed in that time, like forestry and wood industry ([[stave (wood)|stave]] fabrication, the production of [[potash]], [[Sawmill|lumber mills]], [[shipbuilding]]). The most profitable one was stave fabrication, the boom of which started in the 1820s with the clearing of the oak forests around [[Karlovac]] and [[Sisak]] and again in the 1850s with the marshy oak masses along the Sava and Drava rivers. Shipbuilding in Croatia played a huge role in the 1850s [[Austrian Empire]], especially the long-range sailing boats. Sisak and [[Vukovar]] were the centres of river-shipbuilding.<ref>[http://hrcak.srce.hr/81678 Mariann Nagy – Croatia in the Economic Structure of the Habsburg Empire in the Light of the 1857 Census], p. 81-82</ref> [[Kingdom of Slavonia|Slavonia]] was also mostly an agricultural land and it was known for its silk production. Agriculture and the breeding of cattle were the most profitable occupations of the inhabitants. It produced [[cereal|corn]] of all kinds, [[hemp]], [[flax]], tobacco, and great quantities of [[liquorice]].<ref name=Nagy>[http://hrcak.srce.hr/81678 Mariann Nagy – Croatia in the Economic Structure of the Habsburg Empire in the Light of the 1857 Census], p. 88</ref><ref name=Penny>[[Society for the Diffusion of Useful Knowledge]]: The Penny Cyclopaedia of the Society for the Diffusion of Useful Knowledge, vol 22, p. 100-101</ref>

The first steps towards industrialization began in the 1830s and in the following decades the construction of big industrial enterprises took place.<ref>[[Mikulas Teich]], [[Roy Porter]]: [https://books.google.com/books?id=z7GVCC0hlBsC The Industrial Revolution in National Context: Europe and the USA], Cambridge University Press, 1996, p. 310</ref> During the 2nd half of the 19th and early 20th century there was an upsurge of industry in Croatia, strengthened by the construction of [[Croatian Railways|railways]] and the electric-power production. The industrial production was still lower than agricultural production.<ref>Mikulas Teich, Roy Porter: [https://books.google.com/books?id=z7GVCC0hlBsC ''The Industrial Revolution in National Context: Europe and the USA''], Cambridge University Press, 1996, p. 311</ref> Regional differences were high. Industrialization was faster in inner Croatia than in other regions, while [[Kingdom of Dalmatia|Dalmatia]] remained one of the poorest provinces of Austria-Hungary.<ref>{{cite book|last=Tanner|first=Marcus|title=Croatia: a nation forged in war|year=2001|edition=2nd|publisher=[[Yale University Press]]|location=New Haven; London|page=[https://archive.org/details/croatianationfor0000tann_f0k3/page/110 110]|isbn=0-300-09125-7|url-access=registration|url=https://archive.org/details/croatianationfor0000tann_f0k3/page/110}}</ref> The slow rate of modernization and rural overpopulation caused extensive emigration, particularly from Dalmatia. According to estimates, roughly 400,000 Croats emigrated from Austria-Hungary between 1880 and 1914. In 1910 8.5% of the population of [[Kingdom of Croatia-Slavonia|Croatia-Slavonia]] lived in urban settlements.<ref name=Frucht>[https://books.google.com/books?id=lVBB1a0rC70C Richard C. Frucht: ''Eastern Europe: An Introduction to the People, Land, and Culture''], p. 462–463</ref>

In 1918 Croatia became part of the [[Kingdom of Yugoslavia]], which was in the interwar period one of the least developed countries in Europe. Most of its industry was based in [[Drava Banovina|Slovenia]] and [[Banovina of Croatia|Croatia]], but further industrial development was modest and centered on [[Textile manufacturing|textile mills]], [[sawmill]]s, [[Brickyard|brick yards]] and food-processing plants. The economy was still traditionally based on agriculture and raising of livestock, with [[peasant]]s accounting for more than half of Croatia's population.<ref name=Frucht /><ref>[https://books.google.com/books?id=-84_kkgMf2QC The ''First Yugoslavia: Search for a Viable Political System''], Hoover Press, 1983, p. 72</ref>

In 1941 the [[Independent State of Croatia]] (NDH), a [[World War II]] [[puppet state]] of [[Nazi Germany|Germany]] and [[Kingdom of Italy|Italy]], was established in parts of [[World War II in Yugoslavia|Axis-occupied Yugoslavia]]. The economic system of NDH was based on the concept of "Croatian [[socialism]]".<ref name=Yeomans1>Rory Yeomans:[https://books.google.com/books?id=Yxv4-iqVe2wC Visions of Annihilation: The Ustasha Regime and the Cultural Politics of Fascism, 1941–1945], University of Pittsburgh Pre, 2013, p. 197</ref> The main characteristic of the new system was the concept of a [[planned economy]] with high levels of state involvement in economic life. The fulfillment of basic economic interests was primarily ensured with measures of repression.<ref name=Matkovic>[[Hrvoje Matković]]: Povijest nezavisne države Hrvatske, Drugo, dopunjeno izdanje Zagreb, 2002., p. 118</ref> All large companies were placed under state control and the property of the regime's national enemies was nationalized. Its currency was the [[Independent State of Croatia kuna|NDH kuna]]. The Croatian State Bank was the central bank, responsible for issuing currency. As the war progressed the government kept printing more money and its amount in circulation was rapidly increasing, resulting in high inflation rates.<ref>Jozo Tomašević: Rat i revolucija u Jugoslaviji 1941–1945, 2010, p. 785</ref>

After World War II, the new [[Communist Party of Yugoslavia]] converted to a [[Planned economy#Command economy|command economy]] on the Soviet model of rapid industrial development. In accordance with the communist plan, mainly companies in the pharmaceutical industry, the food industry and the consumer goods industry were founded in Croatia. Metal and [[heavy industry]] was mainly promoted in [[Socialist Republic of Bosnia and Herzegovina|Bosnia]] and [[Socialist Republic of Serbia|Serbia]]. By 1948 almost all domestic and foreign-owned capital had been nationalized. The industrialization plan relied on high taxation, fixed prices, [[World War II reparations towards Yugoslavia|war reparations]], Soviet credits, and export of food and raw materials. Forced [[Collectivization in Yugoslavia|collectivization]] of agriculture was initiated in 1949. At that time 94% of agricultural land was privately owned, and by 1950 96% was under the control of the social sector. A rapid improvement of food production and the standard of living was expected, but due to bad results the program was abandoned three years later.<ref name=Frucht />

Throughout the 1950s [[Socialist Republic of Croatia|Croatia]] experienced rapid urbanization. [[Decentralization]] came in 1965 and spurred growth of several sectors including a prosperous tourist industry. [[SR Croatia]] was, after [[SR Slovenia]], the second most developed republic in [[Socialist Federal Republic of Yugoslavia|Yugoslavia]] with a ~55% higher GDP per capita than the Yugoslav average, generating 31.5% of Yugoslav GDP or $30.1Bn in 1990.<ref>{{cite web | url=https://data.un.org/Data.aspx?q=gdp+per+capita+yugoslavia&d=SNAAMA&f=grID:101;currID:USD;pcFlag:1;crID:890 | title=UNdata &#124; record view &#124; per capita GDP at current prices - US dollars }}</ref> Croatia and Slovenia accounted for nearly half of the total [[Economy of the Socialist Federal Republic of Yugoslavia|Yugoslav GDP]], and this was reflected in the overall [[standard of living]]. In the mid-1960s, Yugoslavia lifted emigration restrictions and the number of emigrants increased rapidly. In 1971 224,722 workers from Croatia were employed abroad, mostly in [[West Germany]].<ref>{{cite web|url=http://www.photius.com/countries/croatia/society/yugoslavia_former_society_guest_workers.html|title=Yugoslavia (former) Guest Workers – Flags, Maps, Economy, History, Climate, Natural Resources, Current Issues, International Agreements, Population, Social Statistics, Political System|website=www.photius.com}}</ref><ref>Ivo Nejašmić: [http://hrcak.srce.hr/index.php?show=clanak&id_clanak_jezik=187703 Hrvatski građani na radu u inozemstvu: razmatranje popisnih podataka 1971, 1981. i 1991.]</ref> Foreign remittances contributed $2 billion annually to the economy by 1990.<ref>Europa Publications Limited. ''Eastern Europe and the Commonwealth of Independent States 1999: 1999''. Routledge, 1999. (pg. 279)</ref> Profits gained through Croatia's industry were used to develop poor regions in other parts of former Yugoslavia, leading to Croatia contributing much more to the federal Yugoslav economy than it gained in return. This, coupled with [[austerity]] programs and [[hyperinflation]] in the 1980s, led to discontent in both Croatia and Slovenia which eventually fuelled political movements calling for independence.<ref name=IBP>International Business Publications: [https://books.google.com/books?id=qND3Dii7qjIC Croatia Investment and Trade Laws and Regulations Handbook], p. 22</ref>[[File:Brodosplit - juice carrier.JPG|thumb|A ship being built in [[Split, Croatia|Split]], 2010]]
[[File:GDP of Croatia at constant prices.png|thumb|right|GDP of Croatia at constant 2010 prices from 1990 to 2017]]
[[File:Real GDP growth in Croatia.png|thumb|right|Real GDP growth in Croatia 2005–2015]]
[[File:Unemployment in Croatia 1996. - 2019.png|thumb|right|Unemployment rate from 1996 to 2019 according to [[Eurostat]]]]

In the late 1980s and early 1990s, with the collapse of socialism and the beginning of [[Transition economy|economic transition]], Croatia faced considerable economic problems stemming from:<ref>{{cite web|url=http://www.iiasa.ac.at/~marek/fbook/00/geos/hr.html|title=CIA – The World Factbook 2000 – Croatia|website=www.iiasa.ac.at}}</ref>
* the legacy of longtime communist mismanagement of the economy;
* damage during the internecine fighting to bridges, factories, power lines, buildings, and houses;
* the large refugee and displaced population, both Croatian and [[Bosnians|Bosnian]];
* the disruption of economic ties; and
* inefficient privatization

At the time Croatia gained independence, its economy (and the whole [[Economy of the Socialist Federal Republic of Yugoslavia|Yugoslavian economy]]) was in the middle of recession. Privatization under the new government had barely begun when war broke out in 1991. As a result of the [[Croatian War of Independence]], infrastructure sustained massive damage in the period 1991–92, especially the revenue-rich tourism industry. The [[Privatization in Croatia|privatization of sovereign assets]] and transformation from a planned economy to a [[market economy]] was thus slow and unsteady, largely as a result of public mistrust when many state-owned companies were sold to politically well-connected at below-market prices. With the end of the war, Croatia's economy recovered moderately, but corruption, cronyism, and a general lack of transparency stymied economic reforms and foreign investment.<ref name="IBP" /><ref name="Benczes">Istvan Benczes: [https://books.google.com/books?id=f4R2BgAAQBAJ Deficit and Debt in Transition: The Political Economy of Public Finances in Central and Eastern Europe], Central European University Press, 2014, p. 203</ref> The privatization of large government-owned companies was practically halted during the war and in the years immediately following the conclusion of peace. In 2000, roughly 70% of Croatia's major companies were still state-owned, including water, electricity, oil, transportation, telecommunications, and tourism.<ref>[https://books.google.com/books?id=lVBB1a0rC70C Eastern Europe: An Introduction to the People, Land, and Culture], p. 473</ref>

The early 1990s experienced high inflation. In 1991 the [[Croatian dinar]] was introduced as a transitional currency, but inflation continued to accelerate. The anti-inflationary stabilization steps in 1993 decreased retail price inflation from a monthly rate of 38.7% to 1.4%, and by the end of the year, Croatia experienced deflation. In 1994 Croatia introduced the [[Croatian kuna|kuna]] as its currency.<ref name="Benczes" /> As a result of the macro-stabilization programs, the negative growth of GDP during the early 1990s stopped and reversed into a positive trend. Post-war reconstruction activity provided another impetus to growth. Consumer spending and private sector investments, both of which were postponed during the war, contributed to the growth in 1995–1997.<ref name="Benczes" /> Croatia began its independence with a relatively low external debt because the debt of Yugoslavia was not shared among its former republics at the beginning. In March 1995 Croatia agreed with the Paris Club of creditor governments and took 28.5% of Yugoslavia's previously non-allocated debt over 14 years. In July 1996 an agreement was reached with the London Club of commercial creditors, when Croatia took 29.5% of Yugoslavia's debt to commercial banks. In 1997 around 60 percent of Croatia's external debt was inherited from former Yugoslavia.<ref name="Benczes2">Istvan Benczes: [https://books.google.com/books?id=f4R2BgAAQBAJ Deficit and Debt in Transition: The Political Economy of Public Finances in Central and Eastern Europe], Central European University Press, 2014, p. 205-206</ref>

At the beginning of 1998 value-added tax was introduced. The central government budget was in surplus in that year, most of which was used to repay foreign debt.<ref>OECD: [https://books.google.com/books?id=WxvKqey-mmoC Agricultural Policies in Emerging and Transition Economies 1999], p. 43</ref> Government debt to GDP had fallen from 27.30% to 26.20% at the end of 1998. However, the consumer boom was disrupted in mid 1998, as a result of the bank crisis when 14 banks went bankrupt.<ref name="Benczes" /> Unemployment increased and GDP growth slowed down to 1.9%. The recession that began at the end of 1998 continued through most of 1999, and after a period of expansion GDP in 1999 had a negative growth of −0.9%.<ref name="unstats">{{cite web|url=http://unstats.un.org/unsd/snaama/introduction.asp|title=United Nations Statistics Division – National Accounts|website=unstats.un.org}}</ref> In 1999 the government tightened its fiscal policy and revised the budget with a 7% cut in spending.<ref name="Gale">Gale Research: [https://books.google.com/books?id=uX8pX4H3u0kC Countries of the World and Their Leaders: Yearbook 2001], p. 456</ref>

In 1999 the private sector share in GDP reached 60%, which was significantly lower than in other former socialist countries. After several years of successful macroeconomic stabilization policies, low inflation and a stable currency, economists warned that the lack of fiscal changes and the expanding role of the state in the economy caused the decline in the late 1990s and were preventing sustainable economic growth.<ref name="Benczes2" /><ref name="Gale" />

{| class="wikitable"
|-
!Year|| GDP growth || Deficit/surplus* || Debt to GDP || Privatization revenues*
|-
|1994|| 5.9% || 1.8% || 22.2% ||
|-
|1995|| 6.8% || −0.7% || 19.3% || 0.9%
|-
|1996|| 5.9%  || −0.4% || 28.5% || 1.4%
|-
|1997|| 6.6% || −1.2% || 27.3% || 2.0%
|-
|1998|| 1.9% || 0.5% || 26.2% || 3.6%
|-
|1999|| −0.9% || −2.2% || 28.5% || 8.2%
|-
|2000|| 3.8% || −5.0% || 34.3% || 10.2%
|-
|2001|| 3.4% || −3.2% || 35.2% || 13.5%
|-
|2002|| 5.2% || −2.6% || 34.8% || 15.8%
|-
| colspan="5" |*<small>Including capital revenues</small> <br />*<small>cumulative, in % of GDP</small>
|}

===21st century===
The new government led by the president of [[Social Democratic Party of Croatia|SDP]], [[Ivica Račan]], carried out a number of structural reforms after it won the [[2000 Croatian parliamentary election|parliamentary elections on 3 January 2000]]. The country emerged from the recession in the 4th quarter of 1999 and growth picked up in 2000.<ref>Istvan Benczes:[https://books.google.com/books?id=f4R2BgAAQBAJ ''Deficit and Debt in Transition: The Political Economy of Public Finances in Central and Eastern Europe''], Central European University Press, 2014, p. 207</ref> Due to overall increase in stability, the economic rating of the country improved and interest rates dropped. Economic growth in the 2000s was stimulated by a credit boom led by newly privatized banks, capital investment, especially in road construction, a rebound in tourism and credit-driven consumer spending. Inflation remained tame and the currency, the kuna, stable.<ref name="IBP" /><ref>{{Cite CIA World Factbook|country=Croatia|date=2 March 2022}}</ref> In 2000 Croatia generated 5,899&nbsp;billion kunas in total income from the shipbuilding sector, which employed 13,592 people. Total exports in 2001 amounted to $4,659,286,000, of which 54.7% went to the countries of the EU. Croatia's total imports were $9,043,699,000, 56% of which originated from the EU.<ref>[https://books.google.com/books?id=lVBB1a0rC70C Richard C. Frucht: ''Eastern Europe: An Introduction to the People, Land, and Culture''], p. 468</ref>

Unemployment reached its peak in late 2002, but has since been steadily declining. In 2003, the nation's economy would officially recover to the amount of GDP it had in 1990.<ref name="croa44">{{cite web |url=http://euce.org/eusa/2011/papers/2f_adams.pdf |title=The Political Economies of Slovenia and Croatia: Does EU and Eurozone Membership Play a Role At All? |last=Adams |first=John |access-date=8 April 2013 |url-status=dead |archive-url=https://web.archive.org/web/20140709085923/http://euce.org/eusa/2011/papers/2f_adams.pdf |archive-date=9 July 2014 }}</ref> In late 2003 the new government led by [[HDZ]] took over the office. Unemployment continued falling, powered by growing industrial production and rising GDP, rather than only seasonal changes from tourism. Unemployment reached an all-time low in 2008 when the annual average rate was 8.6%,<ref name="eurostat">{{Cite web|url=https://ec.europa.eu/eurostat/web/main/eurostat/web/main/help/faq/data-services|title=Data services - Eurostat|website=ec.europa.eu}}</ref> GDP per capita peaked at $16,158,<ref name="unstats" /> while public debt as percentage of GDP decreased to 29%. Most economic indicators remained positive in this period except for the [[external debt]] as Croatian firms focused more on empowering the economy by taking loans from foreign resources.<ref name="croa44" /> Between 2003 and 2007, Croatia's private-sector share of GDP increased from 60% to 70%.<ref>{{cite web|url=http://www.qfinance.com/country-profiles/croatia|title=qfinance.com|website=www.qfinance.com|access-date=8 April 2013|archive-url=https://web.archive.org/web/20130209043630/http://www.qfinance.com/country-profiles/croatia|archive-date=9 February 2013|url-status=dead}}</ref> The [[Croatian National Bank]] took steps to curb further growth of indebtedness of local banks with foreign banks. The dollar debt figure is adversely affected by the EUR-USD ratio—over a third of the increase in debt since 2002 is due to currency value changes.

Economic growth has been hurt by the global financial crisis.<ref name="heritage">{{cite web|url=http://www.heritage.org/index/country/croatia|archive-url=https://web.archive.org/web/20090115142435/http://www.heritage.org/index/country/Croatia|url-status=unfit|archive-date=15 January 2009|title=Croatia Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption|publisher=The Heritage Foundation}}</ref> Immediately after the crisis it seemed that Croatia did not suffer serious consequences like some other countries. However, in 2009, the crisis gained momentum and the decline in GDP growth, at a slower pace, continued during 2010. In 2011 the GDP stagnated as the growth rate was zero.<ref name="Dalic">Martina Dalić (2013): "Croatia: A Prolonged Crisis without Recovery" in Novotny Vitt (ed.) ''[https://books.google.com/books?id=UYZcCO9UEfkC From Reform to Growth: Managing the Economic Crisis in Europe]'', Centre for European Studies, Brussels,  May/2013, p. 67-88</ref> Since the global crisis hit the country, the unemployment rate has been steadily increasing, resulting in the loss of more than 100,000 jobs.<ref>{{cite web|url=http://www.balkaninsight.com/en/article/croatia-loses-battle-with-crisis|title=Economic Outlook Darkens in Croatia :: Balkan Insight|website=www.balkaninsight.com|date=29 August 2012}}</ref> While unemployment was 9.6% in late 2007,<ref name="bwhuxz">{{cite web|url=http://www.hnb.hr/statistika/e-ekonomski_indikatori.htm?tsfsg=15127d5832d6ac210a43438afd2fc966|title=Ekonomski Indikatori<!-- Bot generated title -->|url-status=dead |archive-url=https://web.archive.org/web/20070928071307/http://www.hnb.hr/statistika/e-ekonomski_indikatori.htm?tsfsg=15127d5832d6ac210a43438afd2fc966|archive-date=28 September 2007 }}</ref> in January 2014 it peaked at 22.4%.<ref name="dzs.hr">{{cite web|url=http://www.dzs.hr|title=Državni Zavod Za Statistiku – Republika Hrvatska|website=www.dzs.hr}}</ref> In 2010 [[Gini coefficient]] was 0,32.<ref>{{cite web|url=http://www.dzs.hr/Hrv_Eng/publication/2011/14-01-02_01_2011.htm|title=Pokazatelji Siromaštva u 2010/Poverty Indicators, 2010|website=www.dzs.hr}}</ref> In September 2012, Fitch ratings agency unexpectedly improved Croatia's economic outlook from negative to stable, reaffirming Croatia's current BBB rating.<ref>{{cite web|url=http://www.balkaninsight.com/en/article/fitch-unexpectedly-improves-croatian-economic-outlook|title=Fitch Cheers Croatia With Upbeat Rating :: Balkan Insight|website=www.balkaninsight.com|date=6 September 2012}}</ref> The slow pace of privatization of state-owned businesses and an over-reliance on tourism have also been a drag on the economy.<ref name="heritage" />

Croatia joined the [[European Union]] on 1 July 2013 as the 28th member state. The Croatian economy is heavily interdependent on other principal economies of Europe, and any negative trends in these larger EU economies also have a negative impact on Croatia. [[Italy]], [[Germany]] and [[Slovenia]] are Croatia's most important trade partners.<ref name="Dalic" /> In spite of the rather slow post-recession recovery, in terms of income per capita it is still ahead of some European Union member states such as [[Bulgaria]], and [[Romania]].<ref name="EurostatGDP">{{cite web|url=http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/GDP_per_capita,_consumption_per_capita_and_comparative_price_levels|title=Statistics Explained|website=epp.eurostat.ec.europa.eu}}</ref> In terms of minimum monthly wage, Croatia is ahead of 9 EU members ([[Greece]], [[Malta]], [[Estonia]], [[Czech Republic]], [[Slovakia]], [[Romania]], [[Latvia]], [[Hungary]], and [[Bulgaria]]) at €970.<ref>{{Cite web |title=Minimum wage statistics |url=https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Minimum_wage_statistics |access-date=2025-02-12 |website=ec.europa.eu |language=en}}</ref>

The annual average unemployment rate in 2014 was 17.3% and Croatia has the third-highest unemployment rate in the European Union, after [[Greece]] (26.5%), and Spain (24.%).<ref name="eurostat" /> Of particular concern is the heavily backlogged judiciary system, combined with inefficient public administration, especially regarding the issues of land ownership and corruption in the public sector. Unemployment is regionally uneven: it is very high in eastern and southern parts of the country, nearing 20% in some areas, while relatively low in the north-west and in larger cities, where it is between 3 and 7%. In 2015 external debt rose by €2.7 billion since the end of 2014 and as of December 2022 is around €50.9 billion.<ref>{{Cite web |title=Croatia External Debt, 1998 – 2023 {{!}} CEIC Data |url=https://www.ceicdata.com/en/indicator/croatia/external-debt |access-date=2025-02-12 |website=www.ceicdata.com}}</ref>

===2016–2019===
During 2015 the Croatian economy started with slow but upward economic growth, which continued during 2016 and conclusive at the end of the year seasonally adjusted was recorded at 3.5%.<ref>{{cite web| url = http://www.rttnews.com/2749294/croatia-gdp-growth-quickens-in-q4.aspx| title = Croatia GDP Growth Quickens In Q4, 28 February 2017, accessed 14 March 2017}}</ref> The better than expected figures during 2016 enabled the Croatian Government and with more tax receipts enabled the repayment of debt as well as narrow the current account deficit during Q3 and Q4 of 2016<ref>{{Cite news|url=https://www.rttnews.com/2723484/croatia-trade-deficit-narrows-in-september.aspx|title=Croatia Trade Deficit Narrows In September|website=RTTNews}}</ref><ref>{{cite news| url = https://www.bloomberg.com/news/articles/2016-03-10/croatia-to-narrow-2016-budget-deficit-on-planned-economic-growth| title = Jasmina Kuzmanovic, Croatia to Narrow 2016 Budget Deficit on Planned Economic Growth, 10 March 2016, accessed 14 March 2017| website = [[Bloomberg News]]| date = 10 March 2016}}</ref> This growth in economic output, coupled with the reduction of government debt has made a positive impact on the financial markets with many ratings agencies revising their outlook from negative to stable, which was the first upgrade of Croatia's credit rating since 2007.<ref>{{cite web| url = https://www.moodys.com/research/Moodys-changes-outlook-on-Croatias-Ba1-government-bond-rating-to--PR_295208| title = Croatia views Moody's outlook upgrade as results of reform: minister, 11 March 2017, accessed 14 March 2017| date = 21 March 2014}}</ref> Due to consecutive months of economic growth and the demand for labour, plus the outflows of residents to other European countries, Croatia had recorded the biggest fall in the number of unemployed during the month of November 2016 from 16.1% to 12.7%.

=== 2020 ===
[[COVID-19 pandemic|COVID-19 Pandemic]] has caused more than 400,000 workers to file for economic aid of 4000.00 [[Croatian kuna|HRK.]]/month. In the first quarter of 2020, Croatian GDP rose by 0.2% but then in Q2 [[Government of Croatia]] announced the biggest quarterly GDP plunge of -15.1% since GDP has been measured. Economic activity also plunged in Q3 2020 when GDP slid by an additional -10.0%.

In autumn 2020 [[European Commission]] estimated total GDP loss in 2020 to be -9.6%. Growth was set to pick up in the last month of Q1 2021 and the second quarter of 2021 respectively +1.4% and +3.0%, meaning that Croatia was set to reach 2019 levels by 2022.<ref>{{cite web|title=Autumn 2020 Economic Forecast|url=https://ec.europa.eu/info/business-economy-euro/economic-performance-and-forecasts/economic-forecasts/autumn-2020-economic-forecast_en|access-date=28 January 2021|website=European Commission - European Commission|language=en}}</ref>

=== 2021 ===
In July 2021 projection was improved to 5.4% due to the strong outturn in the first quarter and the positive high-frequency indicators concerning consumption, construction, industry and tourism prospects.<ref>{{cite web|date=7 July 2021|title=European Commission revises up Croatia's 2021 GDP forecast to 5.4 pct|url=https://hr.n1info.com/english/news/european-commission-revises-up-croatias-2021-gdp-forecast-to-5-4-pct/|access-date=17 November 2021|website=N1|language=hr}}</ref> In November 2021 Croatia outperformed these projections and the real GDP growth was calculated to be 8.1% for the year 2021, improving its projection of 5.4% GDP growth made in July.<ref>{{cite web|title=EU Commission raises forecast for Croatia's 2021 GDP growth to 8.1%|url=http://seenews.com/news/eu-commission-raises-forecast-for-croatias-2021-gdp-growth-to-81-760968|access-date=17 November 2021|website=seenews.com|date=11 November 2021 |language=en}}</ref> The recovery was supported by strong private consumption, the better-than-expected performance of tourism and the ongoing resilience of the export sector. Preliminary data point to tourism-related expenditure already exceeding 2019 levels, which has been supportive of both employment and consumption. Exports of goods have also continued to perform strongly (up 43%yoy in 2Q21) pointing to resilient competitiveness.<ref>{{cite web|url=https://www.fitchratings.com/research/sovereigns/fitch-upgrades-croatia-to-bbb-outlook-positive-12-11-2021|access-date=17 November 2021|website=www.fitchratings.com|title=Fitch Upgrades Croatia to 'BBB'; Outlook Positive}}</ref> Croatian merchandise exports in the first nine months of 2021 amounted to €13.3 billion, an annual increase of 24.6%. At the same time, imports rose 20.3% to €20.4 billion. The coverage of imports by exports for the first nine months is 65.4%.<ref>{{cite web|date=9 November 2021|title=Izvoz porastao za 24,9 posto, uvoz za 20,6. Razlika je još uvijek velika na strani uvoza|url=https://www.novilist.hr/novosti/gospodarstvo/izvoz-porastao-za-249-posto-uvoz-za-206/|access-date=17 November 2021|website=Novi list|language=en}}</ref> This made 2021 Croatian export's record year as the trade off-set from 2019 was exceeded by €2 billion.<ref name=":1">{{cite web|title=Rekordna godina: Skor iz 2019. nadmašen za 2 milijarde eura|url=https://www.poslovni.hr/hrvatska/rekordna-izvozna-godina-skor-iz-2019-nadmasen-za-2-milijarde-eura-4312268|access-date=17 November 2021|language=en-US}}</ref>

Exports recovered in all major markets, more precisely with all [[European Union|EU]] countries and [[Central European Free Trade Agreement|CEFTA]] countries. Specifically, on the EU market, only a lower export result is recorded in relations with [[Sweden]], [[Belgium]] and [[Luxembourg]]. [[Italy]] is again the main market for Croatian products, followed by [[Germany]] and [[Slovenia]]. Apart from the high contribution of [[crude oil]] that [[INA d.d.|Ina]] sends to [[Hungary]] to the [[MOL (company)|Mol]] refinery for processing, the export of [[artificial fertilizer]]s from [[Petrokemija]] also has a significant contribution to growth.

For 2022, the [[European Commission|Commission]] revised downwards its projection for Croatia's economic growth to 5.6% from 5.9% previously predicted in July 2021. Commission again confirmed that the volume of Croatia's GDP should reach its 2019 level during 2022, while in 2023 the GDP will grow by 3.4%. The Commission warned that the key downside risks stem from Croatia's relatively low [[Deployment of COVID-19 vaccines|vaccination rates]], which could lead to stricter containment measures, and continued delays of the [[2020 Zagreb earthquake|earthquake-related reconstruction]]. Croatia's entry into the [[Schengen Area|Schengen area]] and [[Croatia and the euro|euro]] adoption towards the end of the forecast period could benefit investment and trade.

On Friday, 12 November 2021 [[Fitch Ratings|Fitch]] raised Croatia's [[List of countries by credit rating|credit rating]] by one level, from ‘BBB−‘ to ‘BBB’, Croatia's highest credit rating in history,<ref name=":2">{{cite news|last=Trkanjec|first=Zeljko|date=15 November 2021|title=Fitch assigns Croatia highest credit rating in history|url=https://www.euractiv.com/section/politics/short_news/fitch-assigns-croatia-highest-credit-rating-in-history/|access-date=17 November 2021|website=www.euractiv.com|language=en-GB}}</ref> with a positive outlook, noting progress in [[Enlargement of the eurozone|preparations for Eurozone membership]] and a strong recovery of the Croatian economy from the pandemic crisis.<ref name=":3">{{cite web|date=15 November 2021|title=Fitch Upgrades Croatia to 'BBB'|url=https://investcroatia.gov.hr/en/fitch-upgrades-croatia-to-bbb/|access-date=17 November 2021|website=Invest Croatia|language=en-US}}</ref> This is also secured by the failure of the [[Euroscepticism|eurosceptic]] party [[Hrvatski Suverenisti]] in a bid on the referendum to block Euro adoption in Croatia.<ref>{{cite web|title=Croatia's eurosceptics fail in bid on referendum to block euro|url=https://www.swissinfo.ch/eng/reuters/croatia-s-eurosceptics-fail-in-bid-on-referendum-to-block-euro/47115182|access-date=17 November 2021|website=SWI swissinfo.ch|language=en|archive-date=17 November 2021|archive-url=https://web.archive.org/web/20211117111146/https://www.swissinfo.ch/eng/reuters/croatia-s-eurosceptics-fail-in-bid-on-referendum-to-block-euro/47115182|url-status=dead}}</ref> In December 2021 Croatia's industrial production increased for the thirteenth consecutive month,<ref>{{cite web|last=Trkanjec|first=Zeljko|date=1 February 2022|title=Industrial production in Croatia up 6.7% in 2021|url=https://www.euractiv.com/section/politics/short_news/industrial-production-in-croatia-up-6-7-in-2021/|access-date=6 February 2022|website=www.euractiv.com|language=en-GB}}</ref> observing the  growth of production increasing in all of the five aggregates.<ref>{{cite web|title=Croatian Bureau of Statistics|url=https://www.dzs.hr/Eng/Covid-19/industry-industrial_production_12_21.html|access-date=6 February 2022|website=www.dzs.hr}}</ref> meaning that  industrial production in 2021 increased by 6.7 percent.<ref>{{cite web|title=Industrijska proizvodnja u 2021. godini porasla 6,7 posto|url=https://www.tportal.hr/biznis/clanak/industrijska-proizvodnja-u-2021-godini-porasla-6-7-posto-foto-20220131|access-date=6 February 2022|website=tportal.hr}}</ref>

In 2021 Croatia joined the list of countries with its own automobile industry,<ref>{{cite web |date=2021-08-20 |title=Why Rimac-Bugatti CEO plans to keep pushing boundaries |url=https://europe.autonews.com/automakers/why-rimac-bugatti-ceo-plans-keep-pushing-boundaries |access-date=2022-04-08 |website=Automotive News Europe |language=en}}</ref> with [[Rimac Automobili]]'s [[Rimac Nevera|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<ref>{{cite web |date=17 November 2021 |title=Bugatti Rimac $310 million Croatian headquarters under construction |url=https://www.carexpert.com.au/car-news/bugatti-rimac-310-million-croatian-headquarters-under-construction |access-date=2022-04-08 |website=CarExpert |language=en}}</ref><ref>{{cite news |title=Rimac breaks ground on new Croatian HQ, complete with a track |language=en-gb |website=Motor1.com |url=https://uk.motor1.com/news/548781/rimac-new-headquarters-track-croatia/ |access-date=2022-04-08}}</ref> This campus will also become the home of R&D for future Bugatti models due to the new joint venture, though these vehicles will be built at Bugatti's Molsheim plant in France.

=== 2022 ===
In late March 2022 [[Croatian Bureau of Statistics]] announced that Croatia's industrial output rose by 4% in February, thus growing for 15 months in a row.<ref name=":6">{{cite web |date=2 April 2022 |title=Industrial Workers Statistics in February Shows Rise m-o-m And Fall y-o-y |url=https://www.total-croatia-news.com/news/61701-industrial-workers-statistics-in-february-shows-rise-m-o-m-and-fall-y-o-y |url-status=dead |archive-url=https://web.archive.org/web/20220403232950/https://www.total-croatia-news.com/news/61701-industrial-workers-statistics-in-february-shows-rise-m-o-m-and-fall-y-o-y |archive-date=3 April 2022 |access-date=3 April 2022 |website=www.total-croatia-news.com |language=en-gb}}</ref><ref name=":7">{{cite web |date=31 March 2022 |title=Croatia's February Industrial Production Up 4% |url=https://www.total-croatia-news.com/business/61636-croatia-s-february-industrial-production-up-4 |url-status=dead |archive-url=https://web.archive.org/web/20220403232947/https://www.total-croatia-news.com/business/61636-croatia-s-february-industrial-production-up-4 |archive-date=3 April 2022 |access-date=3 April 2022 |website=www.total-croatia-news.com |language=en-gb}}</ref> Croatia continued to have strong growth during 2022 fuelled by tourism revenue<ref name=":8">{{Cite web |title=Croatia's tourism revenue expected to reach record high this year-Xinhua |url=https://english.news.cn/20220816/a4b656c23140487b91a770ae9845667c/c.html |access-date=2022-10-17 |website=english.news.cn}}</ref> and increased exports.<ref name=":9">{{Cite web |date=2022-09-28 |title=EBRD more than doubles forecast of Croatia's GDP growth |url=https://n1info.hr/english/news/ebrd-more-than-doubles-forecast-of-croatias-gdp-growth/ |access-date=2022-10-17 |website=N1 |language=hr}}</ref><ref name=":10">{{Cite web |last=PoslovniPuls |date=2022-10-11 |title=Podaci DZS-a: Izvoz raste impresivno, ali uvoz još više |url=https://poslovnipuls.com/2022/10/11/podaci-dzs-a-izvoz-raste-impresivno-ali-uvoz-jos-vise/ |access-date=2022-10-17 |website=PoslovniPuls |language=hr}}</ref> According to a preliminary estimate, Croatia's GDP in Q2 grew by 7.7% from the same period of 2021.<ref name=":11">{{Cite web |title=Government of the Republic of Croatia - Tourism figures indicate higher-than-forecast economic growth |url=https://vlada.gov.hr/news/tourism-figures-indicate-higher-than-forecast-economic-growth/35997 |access-date=2022-10-16 |website=vlada.gov.hr}}</ref> [[International Monetary Fund|The International Monetary Fund]] (IMF) projected in early September 2022 that Croatia's economy will expand by 5.9% in 2022, whilst [[European Bank for Reconstruction and Development|EBRD]] expects Croatian GDP growth to reach 6.5% by the end of 2022.<ref name=":12">{{Cite web |title=EBRD lifts Croatia's 2022 GDP fcast to 6.5%, cuts 2023 projection |url=http://seenews.com/news/ebrd-lifts-croatias-2022-gdp-fcast-to-65-cuts-2023-projection-799428 |access-date=2022-10-17 |website=seenews.com |date=28 September 2022 |language=en}}</ref> [[Pfizer]] announced launching a new production plant in [[Savski Marof]]<ref name=":13">{{Cite web |date=2022-06-10 |title=Jutarnji list - Pfizer u Hrvatskoj gradi tvornicu vrijednu 100 milijuna eura: Proizvodit će biološke lijekove za rijetke bolesti |url=https://novac.jutarnji.hr/novac/aktualno/pfizer-u-hrvatskoj-gradi-tvornicu-vrijednu-100-milijuna-eura-proizvodit-ce-bioloske-lijekove-za-rijetke-bolesti-15208935 |access-date=2022-10-17 |website=novac.jutarnji.hr |language=hr-hr}}</ref> whilst Croatian [[IT industry]] grew 3.3%<ref name=":14">{{Cite web |title=Croatia's IT sector boosts revenue 3.3% to 27.8 bln kuna (3.7 bln euro) in 2020 |url=http://seenews.com/news/croatias-it-sector-boosts-revenue-33-to-278-bln-kuna-37-bln-euro-in-2020-764929 |access-date=2022-10-17 |website=seenews.com |date=9 December 2021 |language=en}}</ref><ref name=":15">{{Cite web |last=Stojkovski |first=Bojan |date=2022-09-30 |title=The Top 10 IT Companies in Croatia in 2022 |url=https://therecursive.com/the-top-10-it-companies-in-croatia-in-2022/ |access-date=2022-10-17 |website=TheRecursive.com |language=en-GB}}</ref> confirming the trend that started with [[COVID-19 pandemic|Coronavirus pandemic]] where the Croatia's [[digital economy]] increased by 16 percent on average annually from 2019 to 2021. It is estimated that by 2030 its value could reach 15 percent of GDP, with the [[Information and communications technology|ICT]] sector being the main driver of that growth.<ref name=":16">{{Cite web |date=2022-09-14 |title=McKinsey: Croatia's digital economy might reach 15 pct of GDP by 2030 |url=https://n1info.hr/english/news/mckinsey-croatias-digital-economy-might-reach-15-pct-of-gdp-by-2030/ |access-date=2022-10-17 |website=N1 |language=hr}}</ref>

In 2022, Croatian economy is expected to grow between 5.9 and 7.8% in real terms and it is expected to reach between $72 and $73.6 billion according to preliminary estimates by Croatian Government surpassing early estimates of 491 billion kuna or $68.5 billion. Croatian Purchasing Power Parity in 2022 for the first time should exceed $40 000, however considering Croatian economy experienced 6 years of deep recession, catching up will take several more years of high growth. Economic outlook for 2023 for Croatian economy are mixed, depends largely on how the big Eurozone economies perform, Croatia's largest trading partners; [[Italy]], [[Germany]], [[Austria]],  [[Slovenia]] and [[France]] are expected to slow down, but avoid recession according to latest economic projections and estimates, so Croatian economy as a result could see better than expected results in 2023, early projections of between 1 and 2.6% economic growth in 2023 with inflation at 7% is a significant slow down for the country, however country is experiencing major internal and inward investment cycle unparalleled in recent history. EU recovery funds <ref>{{Cite web |title=Croatia's recovery and resilience plan |url=https://commission.europa.eu/business-economy-euro/economic-recovery/recovery-and-resilience-facility/croatias-recovery-and-resilience-plan_en |website=commission.europa.eu}}</ref> in tune of €8.7 billion coupled with large EU investments in recently earthquake affected areas of Croatia, as well as major investments by local business in to [[renewable]] energy sector, also EU supported and funded, as well as major investments in transport infrastructure and rapidly expanding Croatia's ICT sector, Croatian economy could see continuation of rapid growth in 2023.

On 12 July 2022, the [[Eurogroup]] approved Croatia becoming the 20th member of the [[Eurozone]], with the formal introduction of the [[Euro]] currency to take place on 1 January 2023.<ref name="as">{{cite news |last= Hughes  |first=Rebecca Ann  |date=12 July 2022|title=As Croatia joins the euro, which 7 EU countries still use their own currency?|url=https://www.euronews.com/travel/2022/07/14/as-croatia-joins-the-euro-which-7-eu-countries-still-use-their-own-currency |work=[[Euronews]]|access-date=21 November 2022}}</ref><ref name="amazing">{{cite news |last=Blenkinsop|first=Philip |date=12 July 2022 |title='Amazing journey': EU accepts Croatia as 20th euro zone member |url=https://www.reuters.com/markets/europe/eu-formally-accepts-croatia-20th-euro-zone-member-2022-07-12/ |work=[[Reuters]] |access-date=21 November 2022}}</ref> Croatia joined the [[Schengen Area]] in 2023.<ref name=":17" /> By 2023, the minimum wage is ostensibly expected to rise to NET 700 [[Euro|EUR]],<ref name=":18">{{Cite web |last=Pajić |first=Darko |date=2022-09-16 |title=Minimalna plaća će porasti na 4000 kuna, sindikati traže više: "To je premalo, mora biti veća od 700 eura" |url=https://www.novilist.hr/novosti/minimalna-placa-ce-porasti-na-4000-kuna-sindikati-traze-vise-to-je-premalo-mora-biti-veca-od-700-eura/ |access-date=2022-10-17 |website=Novi list |language=en}}</ref><ref name=":19">{{Cite web |title=Plenković: Povećat ćemo minimalnu plaću, a EK smo poslali zahtjev za uplatu 700 mil. eura |url=https://www.vecernji.hr/vijesti/vlada-ce-danas-utvrditi-najvise-maloprodajne-cijene-naftnih-derivata-1618412 |access-date=2022-10-17 |website=www.vecernji.hr |language=hr}}</ref><ref name=":20">{{Cite web |title=Minimalna plaća mogla bi rasti na 4 tisuće kuna. Sindikati traže pet tisuća |url=https://www.nacional.hr/minimalna-placa-mogla-bi-rasti-na-4-tisuce-kuna-sindikati-traze-pet-tisuca/ |access-date=2022-10-17 |website=nacional.hr|date=16 September 2022 |language=hr}}</ref> increasing consumer spending.<ref name=":21" />