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Croatia vs. Bosnia and Herzegovina

Economy

CroatiaBosnia and Herzegovina
Economy - overview

Though still one of the wealthiest of the former Yugoslav republics, Croatia's economy suffered badly during the 1991-95 war. The country's output during that time collapsed, and Croatia missed the early waves of investment in Central and Eastern Europe that followed the fall of the Berlin Wall. Between 2000 and 2007, however, Croatia's economic fortunes began to improve with moderate but steady GDP growth between 4% and 6%, led by a rebound in tourism and credit-driven consumer spending. Inflation over the same period remained tame and the currency, the kuna, stable.

Croatia experienced an abrupt slowdown in the economy in 2008; economic growth was stagnant or negative in each year between 2009 and 2014, but has picked up since the third quarter of 2014, ending 2017 with an average of 2.8% growth. Challenges remain including uneven regional development, a difficult investment climate, an inefficient judiciary, and loss of educated young professionals seeking higher salaries elsewhere in the EU. In 2016, Croatia revised its tax code to stimulate growth from domestic consumption and foreign investment. Income tax reduction began in 2017, and in 2018 various business costs were removed from income tax calculations. At the start of 2018, the government announced its economic reform plan, slated for implementation in 2019.

Tourism is one of the main pillars of the Croatian economy, comprising 19.6% of Croatia's GDP. Croatia is working to become a regional energy hub, and is undertaking plans to open a floating liquefied natural gas (LNG) regasification terminal by the end of 2019 or early in 2020 to import LNG for re-distribution in southeast Europe.

Croatia joined the EU on July 1, 2013, following a decade-long accession process. Croatia has developed a plan for Eurozone accession, and the government projects Croatia will adopt the Euro by 2024. In 2017, the Croatian government decreased public debt to 78% of GDP, from an all-time high of 84% in 2014, and realized a 0.8% budget surplus - the first surplus since independence in 1991. The government has also sought to accelerate privatization of non-strategic assets with mixed success. Croatia's economic recovery is still somewhat fragile; Croatia's largest private company narrowly avoided collapse in 2017, thanks to a capital infusion from an American investor. Restructuring is ongoing, and projected to finish by mid-July 2018.

Bosnia and Herzegovina has a transitional economy with limited market reforms. The economy relies heavily on the export of metals, energy, textiles, and furniture as well as on remittances and foreign aid. A highly decentralized government hampers economic policy coordination and reform, while excessive bureaucracy and a segmented market discourage foreign investment. The economy is among the least competitive in the region. Foreign banks, primarily from Austria and Italy, control much of the banking sector, though the largest bank is a private domestic one. The konvertibilna marka (convertible mark) - the national currency introduced in 1998 - is pegged to the euro through a currency board arrangement, which has maintained confidence in the currency and has facilitated reliable trade links with European partners. Bosnia and Herzegovina became a full member of the Central European Free Trade Agreement in September 2007. In 2016, Bosnia began a three-year IMF loan program, but it has struggled to meet the economic reform benchmarks required to receive all funding installments.

Bosnia and Herzegovina's private sector is growing slowly, but foreign investment dropped sharply after 2007 and remains low. High unemployment remains the most serious macroeconomic problem. Successful implementation of a value-added tax in 2006 provided a steady source of revenue for the government and helped rein in gray-market activity, though public perceptions of government corruption and misuse of taxpayer money has encouraged a large informal economy to persist. National-level statistics have improved over time, but a large share of economic activity remains unofficial and unrecorded.

Bosnia and Herzegovina's top economic priorities are: acceleration of integration into the EU; strengthening the fiscal system; public administration reform; World Trade Organization membership; and securing economic growth by fostering a dynamic, competitive private sector.

GDP (purchasing power parity)$116.339 billion (2019 est.)

$113.105 billion (2018 est.)

$110.016 billion (2017 est.)

note: data are in 2010 dollars
$49.224 billion (2019 est.)

$47.94 billion (2018 est.)

$46.212 billion (2017 est.)

note: data are in 2010 dollars
GDP - real growth rate2.94% (2019 est.)

2.7% (2018 est.)

3.14% (2017 est.)
3% (2017 est.)

3.2% (2016 est.)

3.1% (2015 est.)
GDP - per capita (PPP)$28,602 (2019 est.)

$27,669 (2018 est.)

$26,674 (2017 est.)

note: data are in 2010 dollars
$14,912 (2019 est.)

$14,423 (2018 est.)

$13,788 (2017 est.)

note: data are in 2010 dollars
GDP - composition by sectoragriculture: 3.7% (2017 est.)

industry: 26.2% (2017 est.)

services: 70.1% (2017 est.)
agriculture: 6.8% (2017 est.)

industry: 28.9% (2017 est.)

services: 64.3% (2017 est.)
Population below poverty line18.3% (2018 est.)16.9% (2015 est.)
Household income or consumption by percentage sharelowest 10%: 2.7%

highest 10%: 23% (2015 est.)
lowest 10%: 2.9%

highest 10%: 25.8% (2011 est.)
Inflation rate (consumer prices)0.7% (2019 est.)

1.4% (2018 est.)

1.1% (2017 est.)
1.2% (2017 est.)

-1.1% (2016 est.)
Labor force1.656 million (2020 est.)806,000 (2020 est.)
Labor force - by occupationagriculture: 1.9%

industry: 27.3%

services: 70.8% (2017 est.)
agriculture: 18%

industry: 30.4%

services: 51.7% (2017 est.)
Unemployment rate8.07% (2019 est.)

9.86% (2018 est.)
33.28% (2019 est.)

35.97% (2018 est.)

note: official rate; actual rate is lower as many technically unemployed persons work in the gray economy
Distribution of family income - Gini index30.4 (2017 est.)

32.1 (2014 est.)
33 (2011 est.)

33.1 (2007)
Budgetrevenues: 25.24 billion (2017 est.)

expenditures: 24.83 billion (2017 est.)
revenues: 7.993 billion (2017 est.)

expenditures: 7.607 billion (2017 est.)
Industrieschemicals and plastics, machine tools, fabricated metal, electronics, pig iron and rolled steel products, aluminum, paper, wood products, construction materials, textiles, shipbuilding, petroleum and petroleum refining, food and beverages, tourismsteel, coal, iron ore, lead, zinc, manganese, bauxite, aluminum, motor vehicle assembly, textiles, tobacco products, wooden furniture, ammunition, domestic appliances, oil refining
Industrial production growth rate1.2% (2017 est.)3% (2017 est.)
Agriculture - productsmaize, wheat, sugar beet, milk, barley, soybeans, potatoes, pork, grapes, sunflower seedmaize, milk, vegetables, potatoes, wheat, plums/sloes, apples, barley, cabbages, poultry
Exports$36.28 billion (2019 est.)

$33.97 billion (2018 est.)

$32.75 billion (2017 est.)
$8.843 billion (2019 est.)

$8.91 billion (2018 est.)

$8.395 billion (2017 est.)
Exports - commoditiesrefined petroleum, packaged medicines, cars, medical cultures/vaccines, lumber (2019)electricity, seating, leather shoes, furniture, insulated wiring (2019)
Exports - partnersItaly 13%, Germany 13%, Slovenia 10%, Bosnia and Herzegovina 9%, Austria 6%, Serbia 5% (2019)Germany 14%, Italy 12%, Croatia 11%, Serbia 11%, Austria 9%, Slovenia 8% (2019)
Imports$37.612 billion (2019 est.)

$35.367 billion (2018 est.)

$32.899 billion (2017 est.)
$12.561 billion (2019 est.)

$12.441 billion (2018 est.)

$11.999 billion (2017 est.)
Imports - commoditiescrude petroleum, cars, refined petroleum, packaged medicines, electricity (2019)refined petroleum, cars, packaged medicines, coal, electricity (2019)
Imports - partnersItaly 14%, Germany 14%, Slovenia 11%, Hungary 7%, Austria 6% (2019)Croatia 15%, Serbia 13%, Germany 10%, Italy 9%, Slovenia 7%, China 6% (2019)
Debt - external$48.263 billion (2019 est.)

$51.176 billion (2018 est.)
$10.87 billion (31 December 2017 est.)

$10.64 billion (31 December 2016 est.)
Exchange rateskuna (HRK) per US dollar -

6.2474 (2020 est.)

6.72075 (2019 est.)

6.48905 (2018 est.)

6.8583 (2014 est.)

5.7482 (2013 est.)
konvertibilna markas (BAM) per US dollar -

1.729 (2017 est.)

1.7674 (2016 est.)

1.7674 (2015 est.)

1.7626 (2014 est.)

1.4718 (2013 est.)
Fiscal yearcalendar yearcalendar year
Public debt77.8% of GDP (2017 est.)

82.3% of GDP (2016 est.)
39.5% of GDP (2017 est.)

44.1% of GDP (2016 est.)

note: data cover general government debt and includes debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data include debt issued by subnational entities, as well as intra-governmental debt; intra-governmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment; debt instruments for the social funds are not sold at public auctions.
Reserves of foreign exchange and gold$18.82 billion (31 December 2017 est.)

$14.24 billion (31 December 2016 est.)
$6.474 billion (31 December 2017 est.)

$5.137 billion (31 December 2016 est.)
Current Account Balance$1.597 billion (2019 est.)

$1 billion (2018 est.)
-$873 million (2017 est.)

-$821 million (2016 est.)
GDP (official exchange rate)$60.687 billion (2019 est.)$20.078 billion (2019 est.)
Credit ratingsFitch rating: BBB- (2019)

Moody's rating: Ba1 (2020)

Standard & Poors rating: BBB- (2019)
Moody's rating: B3 (2012)

Standard & Poors rating: B (2011)
Ease of Doing Business Index scoresOverall score: 73.6 (2020)

Starting a Business score: 85.3 (2020)

Trading score: 100 (2020)

Enforcement score: 70.6 (2020)
Overall score: 65.4 (2020)

Starting a Business score: 60 (2020)

Trading score: 95.7 (2020)

Enforcement score: 57.8 (2020)
Taxes and other revenues46.1% (of GDP) (2017 est.)44% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)0.8% (of GDP) (2017 est.)2.1% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 16.6%

male: 14.5%

female: 19.8% (2019 est.)
total: 33.8%

male: 31.3%

female: 37.9% (2019 est.)
GDP - composition, by end usehousehold consumption: 57.3% (2017 est.)

government consumption: 19.5% (2017 est.)

investment in fixed capital: 20% (2017 est.)

investment in inventories: 0% (2017 est.)

exports of goods and services: 51.1% (2017 est.)

imports of goods and services: -48.8% (2017 est.)
household consumption: 77.4% (2017 est.)

government consumption: 20% (2017 est.)

investment in fixed capital: 16.6% (2017 est.)

investment in inventories: 2.3% (2017 est.)

exports of goods and services: 38.7% (2017 est.)

imports of goods and services: -55.1% (2017 est.)
Gross national saving25.3% of GDP (2019 est.)

25.3% of GDP (2018 est.)

25.3% of GDP (2017 est.)
16.6% of GDP (2019 est.)

15.9% of GDP (2018 est.)

13.7% of GDP (2017 est.)

Source: CIA Factbook