Croatia declared its independence from Yugoslavia in 1991. This was followed by four years of war between the former Yugoslavian states. Ruled by the Austro-Hungarian Empire and communism for many years, Croatia had much to overcome. It is still establishing itself as a country and is currently working hard to reform its structure and enter the European Union.
Croatia was one of the wealthiest Yugoslavian states but its economy suffered badly during the 1991-1995 war. Investment in the rest of Europe, which was currently booming, was no longer an option. In the last seven years Croatia has greatly improved with a large increase in tourism and consumer spending. Croatia still has issues to deal with such as high unemployment rates and political concerns but the hope for structural reform comes with joining the EU.
Level of Wealth
Croatia’s economic status has slowly increased in the last few years. Croatia has a steady GDP growth rate of 4.8% (2006) and inflation has remained steady. Its currency, the Kuna, is stable but not strong. The exchange rate is currently 1 US Dollar= 4.9867 Kuna, which has improved from 2006 where it was 1 US Dollar=5.8625 Kuna. Croatia’s GDP (Purchasing Power Parity) was $60.38 billion in 2006 and its GDP per capita was $13,400. One of the main issues in Croatia is unemployment. The unemployment rate in 2006 was 17.2% which is very high, but it has been decreasing by roughly 5% each year. Although literacy rates are very high (99% for men and 96% for women) there are a significant amount of people out of work, especially young adults (ages 18-24) where the unemployment rate reaches 37%. Poverty has declined over the past seven years but around 11% still live under the poverty line. Another 10% are at risk of poverty. Poverty is highest among households headed by elderly, who face a poverty risk twice the average. Pension is very low in Croatia which causes the elderly to suffer greatly, especially those that are...