Croatia´s Economy Crisis Essay

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The economy of Croatia was hit by Global Financial Crisis in 2009 and currently is in its 6th consecutive year of recession. The country has also been affected by the Eurozone crisis, since Croatia is dependent on the economy of the EU. Approximately half of Croatia’s trade is with the Eurozone, namely with Germany, Italy, Slovenia, Austria, and the Eurozone is the basis of around 75% of foreign direct investment (FDI) that flows into Croatia. Nowadays Croatia’s economy remains to be in need of foreign investment and in demand for its exports. Moreover, Croatia’s economy is exposed to Eurozone crisis through foreign banks in the country. Croatia is still struggling to exit the crisis and achieve economic growth. Furthermore, the …show more content…
Reformations in these sectors are crucial for Croatia’s economy since as a member of the EU Croatia now has an access to the single market and to extensive EU Structural and Cohesion funds. In order to maximize the use of EU funds Croatia primary has to solve its structural impediments. Croatia’s highest priority is reach sustainable economic growth while maintaining macro stability. In order to accomplish this objective the economy's international competitiveness must be reinforced through internal structural reforms since macroeconomic policy is restricted by the need for fiscal consolidation and the huge external debt. The fiscal consolidation entails considerable expenditure reforms to pursue to reorganize present costs concerning a more growth-focused and maintainable model. Croatia’s economic stagnation since 2009 is an obvious sign of structural impediments, which has to be immediately restructured. As a member of the EU, Croatia is expected to subsidy from huge net inflows of incomes of an average size of 2% of GDP in 2013–20. In general, the effect of EU transfers on Croatia’s economic growth is predicted to be positive, EU accession will influence negatively fiscal stance of Croatia in the medium period. Productively absorbing EU funds, while rationalizing the budget, will both guarantee fiscal sustainability and

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