IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Croatia's Delayed Transition: Competitiveness and Economic Policy Challenges

Listed author(s):
  • Vladimir Gligorov


    (The Vienna Institute for International Economic Studies, wiiw)

  • Hermine Vidovic


    (The Vienna Institute for International Economic Studies, wiiw)

The report gives an overview of the overall trends in output and employment in Croatia, and of the country's fiscal and external sectors. It concentrates in more detail on the manufacturing sector and its competitiveness in comparison with developments in other Central, East and Southeast European economies. Finally some economic policy issues specific to Croatia are discussed. The Croatian economy, hit hard by output declines in the 1990s, has not yet recovered to its pre-transition levels. In contrast to the largely successful stabilization of prices and the exchange rate, Croatia's external position has deteriorated considerably over recent years. Gross foreign indebtedness reached a record level in 2003, more than 80% of GDP. A positive role is played by the services sector high surpluses are registered in services trade, and the sector has also a high proportion in the total FDI stock, primarily in the transport and telecom segment. 2002 manufacturing output reached only slightly more than 60% of its 1990 level; the single positive exception was the paper and printing industry. In comparison with the EU and the CEE countries, the output structure of Croatian manufacturing is more similar to the less advanced southern EU countries and also to Bulgaria and Romania. On the EU market Croatian manufacturing has been continuously losing export shares. As Croatia's trade deficit with the EU was growing, the deterioration was observable in most manufacturing branches, pointing to a widespread weakening of the country's international competitiveness. As for exchange-rate and fiscal policies, if increasing risks to macroeconomic stability are to be avoided, a move towards a more flexible exchange rate may still be advisable in order to enhance industrial competitiveness and to allow for a more supportive monetary policy. Further fiscal adjustments would be needed to promote investment and thus increase employment.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: Order URL / Description
Download Restriction: Only to order

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Paper provided by The Vienna Institute for International Economic Studies, wiiw in its series wiiw Research Reports with number 304.

in new window

Length: 48 pages including 27 Tables and 8 Figures
Date of creation: Mar 2004
Publication status: Published as wiiw Research Report
Handle: RePEc:wii:rpaper:rr:304
Contact details of provider: Postal:
Rahlgasse 3, A-1060 Vienna

Phone: (+43-1) 533 66 10
Fax: (+43-1) 533 66 10-50
Web page:

More information through EDIRC

Order Information: Web:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:wii:rpaper:rr:304. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Customer service)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.