Croatia’s economy is ranked 45th in the 2022 Index for economic freedom, with a score of 67.6. Croatia is placed 27th out of 45 countries in Europe, with an overall score that is lower than the regional average but higher than the global average.
What is the cause of Croatia’s poverty?
Croatia is sandwiched between central and southeastern Europe, with a smattering of small islands dotting its Adriatic Sea shoreline. Despite being a member of the prosperous European Union, Croatia remains economically unstable, and a large portion of the population lives in poverty. Here is a list of ten facts about poverty in Croatia that will help you understand the current situation.
Facts About Poverty in Croatia
- High Poverty Rates: In 2008, Croatia’s poverty rate increased dramatically, outpacing that of other EU nations. Approximately one-third of all inhabitants are living in great material deprivation, with just over 15% unable to purchase the basic essentials for a comfortable life. In addition, in Croatia, there is a link between poverty and inequality. As the world around us grows, a bigger income is required. This makes it difficult for workers without a high school diploma to afford the items they need to improve their level of living.
- Croatia has a significant debt burden: Croatia’s national debt reached $45.6 billion in 2018, accounting for 74.1 percent of the country’s GDP. This equates to a debt of $11,048 for each Croatian citizen. Despite the fact that the ratio has been improving since 2014, central government spending still far surpasses government revenues. This could mean that Croatian citizens would be burdened by foreign debt for the foreseeable future.
- Croatia has the EU’s fourth highest young unemployment rate, with statistics showing that the rate was 23 percent in January 2019. The Croatian government, according to Marijana Petir, a member of the European Parliament, has established “improper job circumstances” thus far. This has prompted educated Croatian youth to seek employment in wealthier European nations with more solid employment chances.
- Children are disproportionately affected by poverty: Around 2.6 million Croatian children were living in poverty when the national debt reached its peak in 2014. These vulnerable categories of people suffer the most from a lack of essential nutrients for growth and an adequate government infrastructure to ensure future opportunities for upward mobility. The United Nations Children’s Fund (UNICEF) is a leading organization dedicated to improving the lives of disadvantaged children. UNICEF and the Croatian government formed a cooperation in 2017, agreeing to work together to improve children’s rights across the country.
- Croatia is Suffering from a Massive Emigration Wave: Records show that much more people have left Croatia during the recession than previously thought. While Croatia had put the figure at 102,000, foreign figures show that the total number is closer to 230,000. Many of these emigrants are refugees or asylum seekers seeking better living conditions in other EU countries.
- Croatia’s Underdeveloped Regions Struggle: Poverty is highest in small towns and communities in the eastern and southeastern boundaries. The impacts of the Croatian War of Independence in the 1990s are causing economic difficulties. This fight to break away from Yugoslavia caused significant harm in these areas, costing $36 billion and destroying thousands of homes.
- Poverty Risk Is Reduced by Education: In Croatia, 37.1 percent of primary school students are at risk of poverty. Those that attend secondary school see a 16 percent reduction in this number. For destitute children in Croatia, even basic levels of education are unlikely, since their families struggle to acquire the supplies needed to succeed.
- Health Care Requires Reform: At the end of 2017, the European Commission issued a report on Croatia’s health-care system, expressing its concerns. Low health-care funding, a shortage of nurses and doctors, and an unhealthy general population are all challenges. Croatians deal with drinking, smoking, and obesity, all of which compromise the immune system and raise the risk of disease.
- The rate of Croatia’s Human Development Index (HDI) is rising: Croatia’s HDI is continually rising, indicating that the country is improving economically. Life expectancy at birth, years of schooling, and GNI per capita are all increasing, according to 2017 indicators. Croatia’s HDI number of 0.831 places it in the very high human development category, but it is still significantly behind the European Union’s average HDI value.
- The EU launched the Programme to Fight Poverty and Social Exclusion in order to combat the twin challenges of poverty and social exclusion. This initiative was adopted by the Croatian government in 2015 as a plan to limit the expansion of these two crises and reduce their impact. When it comes to administering the program, the Croatian government has taken a regional approach, allocating money based on which communities are in the most desperate need of assistance.
Concluding Thoughts
These ten facts about poverty in Croatia highlight the challenges that the Croatian people have faced, as well as some of the steps that the central government is taking to address these issues. Since 2014, Croatia has made slow but significant improvement. Croatia must put in more effort if it is to become one of Europe’s wealthiest countries.
Is Croatia Europe’s poorest country?
Because Russia initiated a military operation in Ukraine in February of this year, the potential of drawing other European countries into the conflict is growing.
In this post, we’ll look at the top 14 poorest European countries based on their GDP per capita as of 2022, according to data from the International Monetary Fund (IMF).
For those who do not come from a wealthy family Gross domestic product divided by the whole population equals GDP per capita. GDP is the total value of the country’s marketed goods and services.
Moldova GDP Per capita $3,300
Moldova, formally known as the Republic of Moldova, is Europe’s poorest country, with a per capita GDP of only $3,300. Moldova is bordered on the north by Romania and the south by Ukraine. The name Moldova is derived from the Moldova River. Moldova, which was once part of the Soviet Union, saw a rapid economic slide after the collapse of the Soviet Union in 1991, and its population were forced to endure terrible financial problems.
Several causes, including social policy failures and food insecurity, contributed to the reduction in industrial and agricultural productivity. Later, the services sector began to flourish, and it currently accounts for more than 60% of the country’s GDP, helping to reduce the number of people living in poverty over the last two decades.
Ukraine GDP Per capita $3,425
With a per capita GDP of $3,425, Ukraine ranks second among Europe’s poorest countries. Ukraine, which was once part of the Soviet Union, was the second-largest economy, but it went into recession after the dissolution of the Soviet Union.
Over the last several years, Ukraine has been embroiled in a civil war that has displaced over 850,000 people and left an estimated 3 million Ukrainians in desperate need of humanitarian assistance.
On February 24, 2012, Russian President Vladimir Putin approved a military intervention in eastern Ukraine. The continuous conflict between Russia and Ukraine has led in over 1.3 million individuals departing Ukraine, one of the highest numbers ever for such a short period of time.
Innocent people were killed, infrastructure was destroyed, and large numbers of people were displaced both inside the country and beyond Europe as a result of the conflict. The United States and its allies have placed harsh economic penalties on Russia, but have declined to send any military assistance to Ukraine, which is not a NATO member (North Atlantic Treaty Organization).
After Russia and France, Ukraine has the third-largest military in the Eurozone. Ukraine covers a total size of 603,628 square kilometers (233,062 sq mi)
Kosovo GDP Per capita $5,020
Kosovo, formally known as the Republic of Kosovo, is a partially recognized country with a $5,020 per capita GDP. Kosovo comes in third place on the list of Europe’s poorest countries, with one-third of the people living in poverty.
In absolute terms, this translates to 550,000 people living in poverty on less than 500 euros per month. Kosovo has a high unemployment rate of more than 30% as of 2020, which is predicted to decrease in the next years as it transitions to a growing country with recent economic growth.
Albania GDP Per capita $5,373
Albania, also known as the Republic of Albania, has a $5,373 GDP per capita. Albania was transitioning from a socialist to a free-market economy following the fall of the Soviet Union in the 1990s.
Albania is rich in natural resources such as oil, natural gas, iron, coal, and limestone, all of which are contributing to the country’s economic revival. Albania, with a land size of 28,748 km2 (11,100 sq mi), is presently a developing country dominated by the service and manufacturing sectors.
North Macedonia GDP Per capita $6,096
North Macedonia, which won independence in 1991, is currently ranked fifth among Europe’s poorest countries. North Macedonia’s economy, which has a GDP per capita of $6,096 USD, has lately seen a significant transformation. More than 90% of the country’s GDP is derived from trade.
Despite the government of North Macedonia’s successful implementation of reforms, the country has a high unemployment rate of 16.6%. North Macedonia had had the highest unemployment rate in the world, at 38.7%.
Bosnia and Herzegovina GDP Per capita $6,536
With a per capita GDP of $6,536 Bosnia and Herzegovina, abbreviated as BiH or B&H, is rated sixth among Europe’s poorest countries. Bosnia’s war legacy is the single most important factor contributing to poverty.
Bosnia and Herzegovina had a thriving economy before the Bosnian War, which lasted from 1992 to 1995. It took the country two decades to return to normalcy.
Many males died in action during the conflict, resulting in one-fourth of Bosnian families being headed by women. Wage disparities exist, with women earning less than men, causing many families to slip into poverty.
Belarus GDP Per capita $6,604
Following the breakup of the Soviet Union, Belarus, like its former Soviet republics, had severe economic difficulties, making it Europe’s sixth poorest country.
Prior to 1990, it had the highest standard of living and a thriving economy. Belarus was in the midst of an economic catastrophe until 1996, when it began to recover. Belarus has a GDP per capita of $6,604 dollars.
Montenegro -GDP Per capita $8,704
Montenegro’s economy, which is mostly based on energy industry, had a GDP per capita of $8,704 in 2012. Rapid urbanization, which leads to deforestation, is depleting the country’s natural resources, making it more susceptible. Gender and age discrimination are prevalent, resulting in salary disparities, particularly for women.
Internally displaced persons and refugees account for over 50,000 people in Montenegro. Montenegro’s poverty rate is nearly six times higher than the national average of 8.6%.
Serbia GDP Per capita $8,748
Serbia is one of the poorest European countries, ranking ninth with a $8,748 per capita GDP. During the early 2000s, Serbia saw strong economic development for eight years.
Because of the global financial crisis, Serbia’s economy contracted in 2009, causing the country’s external debt to soar to 63.8 percent of GDP. Natural disasters such as floods and earthquakes are common in Serbia, posing a threat to the country’s economic development.
Bulgaria GDP Per capita $11,350
With a per capita GDP of $11,350, Bulgaria is rated tenth among Europe’s poorest countries. Bulgaria attempted to turn itself into a free-market democratic economy after losing its soviet primary market in the 1990s, however this resulted in a deeper hole in the economy.
Bulgaria was once again heavily struck by the worldwide financial crisis of 2008. According to IMF data, Bulgaria’s economy is vulnerable since more than 41% of the country’s population is at danger of poverty.
Croatia GDP Per capita $14,033
Croatia, formally known as the Republic of Croatia, is the 11th poorest country in Europe, with a per capita GDP of $14,033. Croatia covers 56,594 square kilometers of land (21,851 square miles).
When tensions built and erupted into war in 1991, the new Croatian government was only getting started on privatization and the transition to a free-market economy. Croatia’s revenue-rich tourism industry suffered significant economic losses as a result of the conflict, which resulted in a more than 40% drop in GDP.
Romania GDP Per capita $14,469
Romania has a GDP per capita of $14,469, which is derived from the Latin word Romanus.
In the early 2000s, Romania saw strong economic expansion, which is today dominated by the service sector. Romania is a machine and electric energy producer that has developed into a net exporter of both.
Poland GDP Per capita $15,304
Poland, officially known as the Republic of Poland, has a per capita GDP of $15,304 and covers 312,696 square kilometers (120,733 sq mi). With a population of almost 38.5 million people, Poland is one of the most populous countries in the European Union.
In terms of purchasing power parity, Poland is now a developed market and the sixth largest. Poland has become the world’s fastest-growing market, with 60 percent of its workforce employed in the service sector and the balance in manufacturing and agriculture.
Hungary GDP Per capita $15,372
With a GDP per capita of 15,372, Hungary is placed 14th among poor European countries. Hungary’s economy was based on agriculture before to WWII. Later forced industrialization policies, influenced by Soviet patterns, altered the country’s economic nature.
Even though it saw significant expansion as a result of Soviet-style economic modernization, it was based on obsolete technology. Heavy industries such as iron, steel, and engineering were given priority over new tech sectors such as modern infrastructure, services, and communication.
Hungary’s free foreign investment laws in the early 1990s were a major success, drawing more than half of all foreign direct investment in Central and Eastern Europe. Hungary’s economy has matured.
Is Croatia self-contained?
Croatia’s agricultural land area is 1.3 million hectares (ha). Croatia also boasts roughly 2.2 million hectares of woodland. Croatia is self-sufficient in wheat, corn, poultry, eggs, and wine production, while also having good conditions for the production of a variety of other agricultural products. Agricultural and food imports, on the other hand, continue to rise. Agricultural production is more important than its GDP share indicates, despite the fact that it only accounts for about 4% of GDP. The great majority of Croatia is rural terrain (92 percent), and rural areas are home to about half of the country’s inhabitants.
Croatia’s political situation is stable.
Croatia is situated on the Adriatic Sea at the crossroads of Central and Southeast Europe. It is a member of the European Union (not Schengen) and NATO. Its workforce is well-educated, English is widely spoken, and the political climate is stable.
Is Croatia considered a developed country?
Croatia’s economy is a developed, high-income service economy, with the tertiary sector accounting for 60% of the country’s total GDP (GDP). Croatia became a member of the World Trade Organization in 2000, NATO in 2009, and the European Union on July 1, 2013. The financial crisis hit Croatia hard, resulting in six years of recession and a 12.5 percent drop in GDP due to delayed reform efforts. Croatia officially exited the recession in the fourth quarter of 2014, and its economy has been growing steadily since then. Croatia’s economy recovered to pre-crisis levels in 2019, but GDP fell 8.4% in 2020 due to the Coronavirus epidemic.
Croatia, on the other hand, recovered thanks to robust private consumption, better-than-expected tourism performance, and a surge in merchandise exports, which totaled 13.3 billion euros in the first nine months of 2021, a 24.6 percent annual rise. As a result, Croatian exports in 2021 set a new high, surpassing the previous year’s total by 2 billion euros.
Tourism accounts for 19.6% of Croatia’s GDP, making it one of the country’s most important industries. Croatia is working to become an energy powerhouse, with its floating LNG regasification terminal on the island of Krk and investments in green energy, particularly wind, solar, and geothermal energy, having opened the 17 MW Velika 1 geothermal power plant in Ciglena in late 2019, which is the largest power plant in continental Europe using binary technology, and plans to start construction on the second one in the summer of 2021. The government plans to spend $1.4 billion on grid modernisation, with the goal of increasing renewable energy source connections by at least 800 MW by 2026 and 2,500 MW by 2030. Renewable energy resources are expected to account for 36.4 percent of total energy consumption in 2030 and 65.6 percent in 2050, according to the government.
Fitch boosted Croatia’s credit rating by one level, from ‘BBB-‘ to ‘BBB,’ Croatia’s highest credit rating in history, with a positive outlook, citing progress in Eurozone preparations and a solid recovery of the Croatian economy from the economic crisis on Friday, November 12th, 2021. Croatia is also on track to join the Schengen region soon, which will boost the country’s tourism industry and make commodities imports and exports much easier.
Is Croatia a decent place to relocate?
Croatia is one of the world’s safest countries. The US State Department rated it as “Level One” in February 2020, the safest level.
The country is also a member of the European Union and the North Atlantic Treaty Organization (NATO) (EU). This implies they are shielded from harm by massive multi-national support networks.
In the 2019 Global Peace Index, Croatia came in 28th place, 100 places ahead of the United States (128).
Croatia’s islands, in particular, include several sparsely populated locations. As a result, critical emergency services in some areas of the country may be delayed.
Croatia is also in an earthquake-prone area, so there’s a chance it’ll be shaken up.