Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.
Croatia is a small and complex market but plays an important role in the economic and political framework of Southeast Europe. This region, the size of Texas in area, represents a market of roughly 60 million people and over $600 billion in GDP. It has significant growth potential, as its integration process into the European Union continues and as local populations strive to achieve the lifestyle of the more developed Western European countries that have three to four times higher GDP per capita.
Croatia has been a member of NATO since 2009 and joined the European Union in 2013. Croatia enjoys an excellent geographic position that could allow it to serve as a regional hub for U.S. companies. Zagreb, its capital, is only about a four-hour drive from Vienna, Venice, Budapest, and Belgrade, and only a two-hour drive from the Adriatic coast. Croatia has excellent roads, sound ICT infrastructure, and a competitive white-collar workforce. The Croatian government has announced significant investments to improve its poorly developed rail system during the next few years. The quality of life in Croatia is very high: it is a safe country, with good food, well-preserved nature, a mild climate, and abundant historical sites and other tourist attractions.
Unfortunately, Croatia has not fully completed the transition to a market economy. A statist mindset still prevails in parts of Croatian society. The income of the majority of Croatians still comes from the public sector, so any reforms to address inefficient public spending, corruption, or bureaucratic and judicial inefficiency usually face strong resistance and can take a long time to implement.
Fortunately, there is also a growing number of vibrant, innovative entrepreneurs leading small-and-medium-sized, sophisticated internationally competitive companies across many industry sectors in Croatia. These companies have strong growth potential and could catalyze the transformation of Croatian society. As these companies tend to buy state-of-the-art, cost-effective equipment and technology, they also represent excellent potential partners for U.S. suppliers.