Economic Growth in Croatia: Potential and Constraints

Author/Editor:

David Moore ; Athanasios Vamvakidis

Publication Date:

August 1, 2007

Electronic Access:

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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.

Series:

Working Paper No. 2007/198

Subject:

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

English

Publication Date:

August 1, 2007

ISBN/ISSN:

9781451867626/1018-5941

Stock No:

WPIEA2007198

Pages:

36

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