Economy

The Croatian economy has a stable functioning market economy according to EU reports and is the most advanced economy of South-Eastern Europe (Greece excluded). The Croatian preliminary 2008 GDP data states that the Croatian GDP is USD 66.7 billion, or just over USD 18,800 per capita (real income), putting Croatia ahead of the EU member-states Romania, Bulgaria, Poland and Lithuania. "Grey" economy of about USD 2 billion is still not included in GDP calculations like in other EU countries, something which would certainly increase it. Average net salary is cca. USD 1000. After Slovenia this is the highest net salary per capita of all transition countries.
The economic output is distributed as follows: Agriculture 6%, industry 27% and service sector 67%. The industrial sector is dominated by shipbuilding, food processing and the chemical industry. Tourism is a notable source of income during the summer. With over 10,0 million foreign tourists in 2006 generating a revenue of EUR 7 billion, Croatia is ranked as the 18th most popular tourist destination in the world. In 2006 Croatia exported goods in value of USD 10.4 billion (FOB) (19.7 billion including service exports).
Unemployment is at 9,1% (International Labour Organization figures) in 2007. Of particular concern is the backlogged judiciary system, combined with inefficient public administration, especially issues of land ownership and corruption. Another main problem includes the large and growing national debt which has reached over 35 billion dollars.
The country has been preparing for membership in the European Union, its most important trading partner. In February 2005, the Stabilization and Association Agreement with the EU officially came into force.
In the first quarter of 2007, Croatian economy rose by 7.1%, in second quarter 6.6%, in the third quarter 5.1% so the annual growth rate which was expected to be around 4.7% has now been revised to 6% or more. Analysts believe that the Croatian economy, after modest growth of around 4.5% so far, is finally entering a period of faster and stronger economic prosperity.