Economic Growth in Croatia: Potential and Constraints

38 Pages Posted: 23 Aug 2007

See all articles by Athanasios Vamvakidis

Athanasios Vamvakidis

International Monetary Fund (IMF) - European Department

Date Written: August 2007

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.

Keywords: Economic growth, Croatia, Privatization, Foreign direct investment, Economic reforms, Working Paper

Suggested Citation

Vamvakidis, Athanasios, Economic Growth in Croatia: Potential and Constraints (August 2007). Available at SSRN: https://ssrn.com/abstract=1007946 or http://dx.doi.org/10.2139/ssrn.1007946

Athanasios Vamvakidis

International Monetary Fund (IMF) - European Department ( email )

700 19th Street NW
Washington, DC 20431
United States

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