Branches of the economy
Croatia does not have large quantities of mineral resources. Coal and other mines (bauxite) were closed in the 1970s and 1980s. It does have significant sources of non-metal minerals, which are used as raw materials in construction (gravel, sand, marl, construction rocks). Croatia has its own natural energy resources, including oil and gas, and most of all renewable energy sources, such as wind, hydroenergy and solar energy. It also extracts and processes large quantities of salt from the sea (salt works in Pag and Ston).
Agriculture and fisheries
In Croatia there is a total of 3.15 million hectares of agricultural land, of which about 2 million is arable land, whilst the remainder consists of pastures, ponds and fish ponds. The different types of climate, relief and soil make it possible to produce a wide range of agricultural products, from arable and industrial crops, to vineyards and continental and Mediterranean fruits and vegetables. Arable farming covers domestic need for cereals and sugar, and most of the demand for industrial crops. Croatia is a wine-growing country, and both continental and Mediterranean grapes are grown here, some of which are indigenous. Vineyards cover 58,000 hectares of land, and in 2017, 760,000 hectolitres of wine were produced.
Istrian olive oils are some of the best and most award-winning oils in the world. Croatia produces about 40,000 hectolitres of olive oil every year.
Livestock is traditionally of lesser importance, but raising cattle, pigs, poultry and sheep is well developed. Slavonian kulen, Dalmatian and Istrian pršut (smoked ham) are world famous and their geographical origin is protected.
Fishing and fish processing are mostly linked to the coastal and island areas of the country. In 2017, about 83,000 tons of sea fish and about 3,300 tons of freshwater fish were caught or farmed. Oily fish (sardines, mackerel) are dominant in sea fishing, and about one fifth are white fish and shellfish and other molluscs. In freshwater fishing, the most common fish are carp, silver carp and trout.
Industry, energy and construction
Industrial production in Croatia has an important place in total production. The most prominent forms are manufacturing and the petrochemical industry, and shipbuilding. Some companies were closed down in the process of transition, or were damaged in the war. This mostly applies to the textile, leather, metal and timber industries. There is also significant production in the construction and energy sectors. Some industries, however, continue to achieve positive results and are active in foreign trade. The value of the sales of industrial products in 2017 was 134.8 billion kunas (EUR 18.7 billion), of which 59 billion kunas was in exports (EUR 7.9 billion). According to their total revenues, the leading industrial branches are the production of food, drinks and tobacco, and these are followed by the chemical and oil industries. In terms of exports, the most prominent is the manufacturing industry, which accounts for 97.8% of all exports. In 2017, the largest export activities were related to coke and oil products (10.9%), finished metal products (9.3%), food products (7.6%), pharmaceutical products (7.2%), electrical equipment (7%), machines and devices (6.8%), mineral products (5.9%), timber and wood products (4.9%), chemical products (4.8%), furniture (4.1%), rubber and plastic products (3.9%), clothing (3.2%), leather (3%), paper (2.5%), computers and computer equipment (1.9%), recorded and printed materials (1.7%), beverages (1.5%) and textile (1.3%).
The energy sector is mainly based on electricity, gas and oil. In 2017, a total of 11,800 GWh of electricity was produced. Almost half of this production came from hydro--electrical power stations, and the remainder from fossil fuel power stations. Some of the production is occasionally exported. Production of natural gas and oil is not sufficient for domestic needs. The oil fields in Slavonia and Podravina meet 20–25% of the needs, whilst the production of natural gas covers about 65% of what is required.
Until the 2009 recession, construction had been one of the most propulsive sectors, especially in road building, housing and commercial construction. The number of construction projects then decreased significantly, but began to increase again after the end of the recession.
Services, trade and transport
Croatia’s road network consists of 29,333 km of categorised roads, of which 1,254 km are motorways. In view of the size of the country and its population, Croatia is first in Southeast Europe in terms of the length of its motorways. The first motorway, from Zagreb to Karlovac, was opened in 1972, but the motorway network was greatly expanded at the end of the 1990s and the beginning of the 2000s. The international system of so-called E-roads includes more than 2,300 km of Croatian roads. Most passenger and goods transport is done by road.
The total length of the railway lines is 2,726 km (36.2% electrified and 9.3% with double tracks). The most important railway hubs are Zagreb and Vinkovci.
Croatia has a long tradition of shipbuilding. In the 1960s and 1970s, the large shipyards in Split, Rijeka and Pula were among the leading ones in the world in terms of tonnage of exported ships. In recent times, small shipyards on the Adriatic (such as, for instance, those in Betina on the island of Murter, in Vela Luka on the island of Korčula, in Solin, Kaštel Sućurac, Rab and Šibenik) and inland (such as those in Čakovec and Zagreb) – where vessels for nautical tourism and coastal navigation are built – have achieved comparatively better results.
There are around 350 ports and docks along the Croatian Coast. The ports of Pula, Rijeka, Zadar, Šibenik, Split, Ploče and Dubrovnik are involved in international trade. In terms of strategic position and harbour traffic, the Port of Rijeka stands out. Links between the islands and the coast are maintained by ferries and shipping lines, which also partially link the Croatian coast with Italy. The most important port in the internal waterways is Vukovar on the River Danube.
There are international airports in Zagreb, Pula, Zadar, Split, Dubrovnik, Osijek, and those on the islands of Brač and Krk (Rijeka).
The Adriatic Oil Line system (JANAF) was built to transport oil; it links the oil terminal in Omišalj on the island of Krk with the Croatian refineries in Rijeka and Sisak, and also has branches towards neighbouring countries. The total length of the oil pipelines is 759 km, of which 610 km is in Croatia.
The telecommunications network is completely digital and the most modern in Southeast Europe. The telecommunications market is liberalised, with several operators in landline and mobile telephony. A total of 76% of households had internet access in 2017, which is below the EU average, but above the level of some members.
In foreign trade, Croatia imports more products than it exports, but the gap between exports and imports has recently been gradually shrinking. In 2018, products valued at EUR 14.5 billion were exported, whilst EUR 23.6 billion worth of products were imported. Croatia exports most products to Bosnia and Herzegovina, Austria, Italy, Germany, Slovenia, the United Kingdom, Serbia, Hungary and Russia, and imports most from Italy, Germany, China, Russia, Austria, Azerbaijan and Bosnia and Herzegovina.
In the service industries, the greatest share is held by tourism, which is recording record results, and related services. In this sector, the highest turnover is achieved by small and medium sized enterprises, but large enterprises still have the most employees.
Through membership in the European Union, Croatia became a beneficiary of the European structural and investment funds (ESIF) which offer financial support to Member States in their economic and social development. The implementation of the Europe 2020 strategy for the 2014–20 budget period is supported through the European Regional Development Fund (ERDF), the Cohesion Fund (CF), the European Social Fund (ESF), the European Agricultural Fund for Rural Development (EAFRD) and the European Maritime and Fisheries Fund (EMFF). The main EU investment policy is regional and urban development, and its aim is to achieve economic, social and territorial cohesion (‘cohesion policy’), job creation, competitiveness, sustainable development and the improvement of the quality of life of citizens.
In accordance with the Partnership Agreement between the European Commission and the Republic of Croatia (2014), Croatia will be allocated a total of 10.727 billion euros for the following operational programmes in the said period: Competitiveness and Cohesion – 6.831 billion euros (ERDF and CF); Efficient Human Resources – 1.617 billion euros (ESF and Youth Employment Initiative); Rural Development Programme – 2.026 billion euros (EAFRD); and Fisheries – 253 million euros (EMFF). Croatia is to invest 80% of the allocated funds – that is, 8.44 billion euros – to achieve the following cohesion-policy objectives: the development of economic, social and communal infrastructure, the strengthening of urban areas and transport interconnections, and the harmonisation of the conditions and quality of life in less developed areas. The applications receiving grants for the allocation of non-repayable funds from the ESIF for projects are given, in principle, a maximum of 85% by the European funds, while 15% comes from national sources. The aim of investing in projects through the use of the ESIF is to promote a comprehensive, sustainable and balanced development of Croatian regions, municipalities and cities; it is expected that two budget periods will be needed to achieve this objective.
From July 2013 to 2019, Croatia paid 2.6 billion euros to the EU budget and received 4.5 billion euros from it, i.e. it was a net recipient of almost 1.9 billion euros. Of the 10.7 billion euros allocated for the 2014–20 budget period, Croatia had signed contracts to the amount of 7.1 billion euros, that is, 66% by the end of the first quarter of 2019. European funds account for 80% of public investments in Croatia.