Croatia’s economy is showing strong signs of stability and growth in 2025, according to new data from the IMF and Eurostat.
With a GDP growth forecast of 3.1% and public debt falling below the eurozone’s 60% threshold, Croatia stands out in the region. Learn how these indicators reflect the country’s post-pandemic economic resilience and responsible fiscal management.
Two Key Economic Indicators from International Institutions
This week, two important pieces of data arrived from international institutions concerning the economic state of Croatia.
The first was released by the International Monetary Fund (IMF), which raised its forecast for Croatia’s economic growth in this year, 2025, to 3.1 per cent. Last autumn, the IMF had been somewhat more cautious, predicting growth of 2.9 per cent. This pattern has been seen in recent years.
International institutions, not only the IMF but also the World Bank, have typically projected lower growth rates for Croatia’s gross domestic product (GDP), only for the final results to exceed expectations.
Conservative Forecasts Now Proving Too Pessimistic
The Croatian Government, too, has proceeded with similar caution in its own forecasts and has also found itself needing to revise figures upwards—something it has not found difficult to accept.
For comparison, Croatia’s GDP growth of 3.1 per cent is four times higher than the average of the eurozone, the group of countries that have adopted the euro. Among the four largest economies, the highest growth is forecast for Spain at 2.5 per cent, while there is no such good news for the economies of Germany, France, and Italy.
Croatia’s Post-Pandemic Growth Outpaces Eurozone
The IMF’s forecasts suggest a continued period of uninterrupted Croatian economic growth at relatively high rates since the end of the COVID-19 pandemic. Naturally, these rates will not be as high as in previous years, but they remain significantly above the eurozone average, which is encouraging.
The second important data point came from the European Statistical Office (Eurostat). According to their figures from this week, Croatia’s public debt fell in the fourth quarter of last year, 2024, below the prescribed ceiling for eurozone countries of 60 per cent of GDP.
Public Debt Falls Below Eurozone Limit
As of December last year, Croatia’s public debt stood at €49.28 billion, or expressed as a share of GDP, 57.6 per cent. It is also significant that this shows a downward trend, as in September it was 59.6 per cent. Notably, during the COVID-19 crisis, when times were difficult, Croatia’s public debt was nearly 90 per cent of GDP.
It is interesting to compare these Eurostat figures with those from other eurozone countries. Greece remains the most indebted country in the European Union, with a public debt exceeding half of its total GDP, although it has shown a recent trend of reduction. However, it will still take a considerable amount of time for improvement.
Debt Situations Across the Eurozone
Second behind Greece are the Italians, whose public debt stands at 135 per cent of their total gross domestic product. For years, their public debt hovered around 110 per cent of GDP, and now it has increased further. It is worth noting that the era of cheap money in the EU (borrowing at low interest rates) was initiated by none other than an Italian—Mario Draghi—while he was President of the European Central Bank.
The two mentioned figures—the forecast for GDP growth and the state of public debt relative to GDP—show that Croatia is maintaining orderly and responsible public finances. The government may be criticised on various other fronts, such as the effectiveness of its fight against corruption and so on, but when it comes to finances, things are kept under control.
Importance of Financial Stability in Uncertain Times
In these uncertain times, when recession may loom for Europe and other parts of the world, this is especially important for smaller countries like Croatia. Namely, if major disruptions occur, smaller nations are more vulnerable than larger ones because they lack the power to influence global decisions that could assist them and must instead face such challenges on their own.