- published: 20 May 2014
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Economy of Croatia is a service-based economy with the tertiary sector accounting for 70% of total gross domestic product (GDP). Croatian GDP in 2010 was 335.5 billion Croatian Kuna and contracted by 1.4% year-on-year. Although Croatian economy had showed signs of recovery in the last quarter of 2010 and officially exited recession in the first quarter of 2011, economic indicators suggest that the recovery may be sluggish with the economy expected to grow by 1.5-1.8% in 2011.
In spite of the rather slow post-recession recovery, in terms of income per capita Croatia is still ahead of some European Union member states such as Bulgaria, Romania, Latvia and Lithuania. Estimated GDP per capita in purchasing power parity (PPP) in 2010 was around USD 19,754 or 63.3% of the EU average for the same year.
The industrial sector with exports of over €1 billion annually is dominated by shipbuilding which accounts for over 10% of exported goods. Food processing and chemical industry also account for significant portions of industrial output and exports. Industrial sector represents 27% of Croatia’s total economic output while agriculture represents 6%. Industrial sector is responsible for 25% of Croatia's GDP, with agriculture, forestry and fishing accounting for the remaining 5% of Croatian GDP.
Croatia (i/kroʊˈeɪʃə/ kroh-AY-shə; Croatian: Hrvatska pronounced [xř̩ʋaːtskaː]), officially the Republic of Croatia (Croatian: Republika Hrvatska listen (help·info)), is a unitary democratic parliamentary republic in Europe at the crossroads of Central Europe, the Balkans, and the Mediterranean. Its capital and largest city is Zagreb. The country is divided into 20 counties and the city of Zagreb. Croatia covers 56,594 square kilometres (21,851 square miles) and has diverse, mostly continental and Mediterranean climates. Croatia's Adriatic Sea coast contains more than a thousand islands. The country's population is 4.29 million, most of whom are Croats, with the most common religious denomination being Roman Catholicism.
In the early 7th century the Croats arrived in area of present-day Croatia. They organised the state into two dukedoms by the 9th century. Tomislav became the first king by 925 AD, elevating Croatia to the status of a kingdom. The Kingdom of Croatia retained its sovereignty for nearly two centuries, reaching its peak during the rule of Kings Peter Krešimir IV and Dmitar Zvonimir. Croatia entered a personal union with Hungary in 1102. In 1527, faced with Ottoman conquest the Croatian Parliament elected Ferdinand I of the House of Habsburg to the Croatian throne. In 1918, after World War I, Croatia was included in the short-lived State of Slovenes, Croats, and Serbs that declared independence from Austria–Hungary and co-founded the Kingdom of Yugoslavia. A Croatian state briefly existed during World War II as a fascist puppet state. After the war, Croatia became a founding member and a federal constituent of the Second Yugoslavia, a socialist state. In June 1991, Croatia declared independence, which came into effect on 8 October of the same year. The Croatian War of Independence was fought successfully during the four years following the declaration.