Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

After becoming the 28th member state of the EU on July 1, 2013, the Croatian economy was only able to return to growth in 2015: since 2008, the country had experienced six consecutive years of economic recession, with the GDP falling by 12% (EU data). After accelerating in 2019, the economy was severely hit by the crisis linked to the covid-19 pandemic (-8%, one of the worst-hit countries in the EU). Nevertheless, the recovery of Croatia’s economy resumed in 2021, mostly supported by strong household consumption and a better-than-expected performance of the tourism sector: the IMF estimated a growth of 6.3% for the year as a whole. Domestic demand is expected to be the main engine of growth throughout the forecast period, coupled with government expenditure supported by the EU Recovery and Resilience Facility (amounting to 5.3% of GDP overall in the period 2020-23. Hence, GDP growth is forecast at 5.8% this year (reaching the pre-pandemic level) and 4% in 2023, although downward risks linked to the recrudescence of infections persist, due to the country’s relatively low vaccination rates.

Croatia's public debt stood at around 87% of GDP in 2021, significantly higher than in 2019 (72.8%) as a consequence of the necessary government measures to counter the pandemic and the consequent economic downturn. The normalization of the situation should help reduce the ratio over the forecast horizon, at 83.6% and 80.3% this year and the next, respectively (IMF). In 2021, the general government deficit was estimated at 3.5% of GDP (from 5.7% in 2020), thanks to the strong economic recovery and the gradual phasing out of support measures. Counting on revenue increase, the government deficit is expected to be at 2.4% of GDP in 2022 and narrow further in 2023, at 1.6% (IMF). Meanwhile, the rise in global energy and food prices contributed to an increase in inflation, which stood at 2% in 2021 and should remain stable over the forecast period.

According to IMF estimates, unemployment stood to 8.4% in 2020, heavily influenced by the negative economic impact of the COVID-19 pandemic. The rate is expected to follow a downward trend in 2022 (8%) and 2023 (7.6%), driven by the overall expansion of economic activity. Though the average revenue of Croatians is still below the European average (with an estimated GDP per capita PPP of USD 29,777 in 2021 according to the IMF), Croatia remains the second most developed economy of the Balkan region, after Slovenia.

Foreign Trade

Croatia, which joined the WTO in 2000, depends heavily on foreign trade, which amounts to 90.6% of the GDP (World Bank, latest data available). The country mainly exports petroleum oils, medicaments, human and animal blood, and electrical transformers; while imports are driven by motor cars, medicaments, blood, petroleum oils and crude oil, and telephones.

In 2020, the EU accounted for 69.7% of Croatian exports (mainly towards Germany, Italy, and Slovenia), followed by Bosnia and Herzegovina (8.6%) and Hungary (7.2%). The leading import origins were the EU (81.2%, reflecting the structure of exports’ destinations), China (4.6%), and Bosnia and Herzegovina (2.9% - data Comtrade and Croatian Bureau of Statistics).

In terms of merchandise, Croatia has a structural trade deficit: according to figures by WTO, in 2020 exports of goods totalled USD 17.1 billion (stable y-o-y) while imports decreased by %5.1, at USD 26.7 billion. However, the country is a net exporter of services, with exports – at USD 9.7 billion – far above imports (USD 3.9 billion). According to figures by the World Bank, the overall trade deficit stood at an estimated 6.7% of GDP in 2020, much higher than the level of 0.3% recorded one year earlier (mostly due to a sharp contraction in services’ exports, at -43.4%). Preliminary figures from the Croatian Bureau of Statistics show that in the first ten months of 2021, total exports of the Republic of Croatia amounted to HRK 114.5 billion ( 25.4% higher than in the same period of 2020). In the same period, total imports reached HRK 174.0 billion (+21.9% y-o-y).

COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Croatia, please visit the official governmental portal Koronavirus.hr, which provides infographics on data by the Croatian Institute of Public Health.
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures

To find out about the latest public health situation in Croatia and the current sanitary measures in vigour, please consult the official governmental portal Koronavirus.hr including the up-to-date information on the containment measures put in place (in Croatian). For public health recommendations, refer to the website of the Croatian Institute of Public Health (in Croatian).
Visit the website of the Croatian government for updates on the restrictions.

Travel restrictions

The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.

Import & export restrictions

For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the portal of the Croatian Customs Administration (in Croatian).
An export license is required to export personal protective equipment outside of the European Union.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Croatia on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

To know about the economic measures taken by the Croatian government to address the impact of the COVID-19 pandemic on the national economy, please visit the official governmental portal Koronavirus.hr, which provides information on the measures taken by each Ministry for the domains under their responsibility (in Croatian). The website of the Ministry of Economy, Entrepreneurship and Crafts provides further info on the support schemes (in Croatian). For a detailed analysis of the economic and fiscal measures, consult the guide by Deloitte.
The information on the EU’s economic response to COVID-19 and the actions to minimise the fallout on the EU member states’ economies of the COVID-19 outbreak is available on the websites of the European Commission and the European Council.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Croatian government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Croatia in the IMF’s Policy Tracker platform.

Support plan for businesses

For the information on the local business support scheme and taxation measures established by the Croatian government to help businesses to deal with the economic impacts of the COVID-19 epidemic on their activity, please consult the official governmental portal Koronavirus.hr, which provides information on the measures taken by each Ministry for the domains under their responsibility (in Croatian). Further information in English can be sourced on the guide by Deloitte.
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters

The government of Croatia can issue guarantees to commercial banks of exporters and to the Croatian Bank for Reconstruction and Development (HBOR) under the export guarantee fund. Furthermore, the European Commission has approved a EUR 790 million Croatian guarantee scheme for companies with export activities affected by the coronavirus outbreak.
The European Commission adopted a Temporary Framework for State aid measures to support the economy in the COVID-19 outbreak, which enables short-term export credit insurance to be provided by the State where needed.