In 2014, Croatia’s economy contracted for its sixth year in a row and although the recession is expected to come to an end in 2015, growth is set to pick up only timidly in 2016. Against this background, the unemployment rate is not expected to decline significantly and future employment growth is likely to be slowed down. Export performance should remain strong as the recovery progresses in the EU. Public debt and the deficit are set to continue on an upward trend in 2015 and 2016.
Croatia is experiencing excessive macroeconomic imbalances, which require decisive policy action and specific monitoring. The Commission will take in May, on the basis of the National Reform Programmes (NRPs) and other commitments to structural reforms announced by that date, the decision to activate the Excessive Imbalance Procedure (EIP). In a context of subdued growth, delayed restructuring of firms and dismal performance of employment, risks related to weak competitiveness, large external liabilities and rising public debt coupled with weak public sector governance, have significantly increased.
Read a complete analysis of Croatia's economy in the country report 2015 [2 MB]
2015 recommendations in brief
The Commission has made six country-specific recommendations to Croatia to help it improve its economic performance. These are in the areas of: public finances and taxation; pensions and health; labour market and wage-setting; public administration and state-owned enterprises; services and justice system; insolvency and financial sector.