Republic of Croatia: Selected Issues Paper

Publication Date:

July 1, 2011

Electronic Access:

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Summary:

Croatia’s economic vulnerability is discussed in this study. Using the balance sheet approach (BSA), this paper analyzes Croatia’s overall and sectoral vulnerabilities. Croatia’s financial sector balance sheet is exposed to liquidity, contagion, and currency risks. With strong pre-crisis prudential policies and parent banks’ willingness to keep or even increase exposures, the economy’s capacity to tackle another major macroeconomic or financial shock is limited. Given the stable exchange rate policy, a consistent set of structural, fiscal, monetary, and prudential policies are needed for sustained growth and reduced vulnerabilities.

Series:

Country Report No. 2011/160

Subject:

English

Publication Date:

July 1, 2011

ISBN/ISSN:

9781455293698/1934-7685

Stock No:

1HRVEA2011002

Pages:

16

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