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Economic Growth in Croatia: Potential and Constraints

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  • Mr. David Moore
  • Mr. Athanasios Vamvakidis

Abstract

This paper examines the factors and constraints that affect recent and potential growth in Croatia, as well as policies that can influence it. On current productivity trends, it estimates Croatia's potential growth rate at 4-4½ percent, a result reasonably robust to different methodologies. To sustain growth at a higher rate in line with the authorities' aspirations, the analysis highlights the critical need to improve the business environment through further measures to reduce the administrative burden, legal uncertainties, and corruption. It also emphasizes the importance of attracting more greenfield foreign direct investment, and reforms to reduce the role of the state in the economy through fiscal consolidation and faster privatization.

Suggested Citation

  • Mr. David Moore & Mr. Athanasios Vamvakidis, 2007. "Economic Growth in Croatia: Potential and Constraints," IMF Working Papers 2007/198, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2007/198
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    References listed on IDEAS

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    6. International Monetary Fund, 2007. "Republic of Croatia: Selected Issues," IMF Staff Country Reports 2007/082, International Monetary Fund.
    7. Philippe Aghion & Steven Durlauf (ed.), 2005. "Handbook of Economic Growth," Handbook of Economic Growth, Elsevier, edition 1, volume 1, number 1.
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    Cited by:

    1. Ines Kersan-Skabic & Lela Tijanic, 2014. "The Influence of Foreign Direct Investments on Regional Development in Croatia," Croatian Economic Survey, The Institute of Economics, Zagreb, vol. 16(2), pages 59-90, December.
    2. Vamvakidis, Athanasios, 2009. "Is there a "reform fatigue" in the euro area?," Economic Modelling, Elsevier, vol. 26(4), pages 767-777, July.
    3. Stjepan Zdunic, 2011. "From the impossible monetary trinity towards economic depression," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 29(2), pages 395-422.
    4. International Monetary Fund, 2012. "Republic of Croatia: Selected Issues," IMF Staff Country Reports 2012/303, International Monetary Fund.
    5. Besnik Taip FETAI & Besime Fekri MUSTAFI & Ariana Besnik FETAI, 2017. "An Empirical Analysis Of The Determinants Of Economic Growth In The Western Balkans," Scientific Annals of Economics and Business (continues Analele Stiintifice), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 64(2), pages 245-254, June.
    6. Maru?a Pescu (Beca) & Camelia ?tefan (Baraba?), 2016. "The Effects of Gaps and Disparities on Economic Growth. A Study of 10 Former Socialist Countries from the CEE, Members of the EU," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 18(43), pages 592-592, August.
    7. Konstantins Benkovskis & Ludmila Fadejeva & Julia Wörz, 2013. "How Important Is Total Factor Productivity for Growth in Central, Eastern and Southeastern European Countries?," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 8-27.

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