Economic Growth in Croatia: Potential and Constraints

David Moore and Athanasios Vamvakidis

No 2007/198, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; reform progress; transition rank; export base; Croatia's rank; EBRD indices; economic growth in Croatia; innovation in Croatia; Business environment; Foreign direct investment; Structural reforms; Total factor productivity; Europe (search for similar items in EconPapers)
Pages: 36
Date: 2007-08-01
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Citations: View citations in EconPapers (8)

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