Economic Growth in Croatia: Potential and Constraints

August 1, 2007

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David Moore, and Athanasios Vamvakidis. Economic Growth in Croatia: Potential and Constraints, (USA: International Monetary Fund, 2007) accessed September 19, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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.

Subject: Balance of payments, Business environment, Economic sectors, Foreign direct investment, Labor, Macrostructural analysis, Production, Structural reforms, Total factor productivity

Keywords: Business environment, Croatia's rank, EBRD indices, Economic growth in Croatia, Europe, Export base, Foreign direct investment, Innovation in Croatia, Reform progress, Structural reforms, Total factor productivity, Transition rank, WP

Publication Details

Pages:

36
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2007/198
Stock No:

WPIEA2007198
ISBN:

9781451867626
ISSN:

1018-5941

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