Bulgaria is the only EU country with lower GDP than Croatia.

Croatia’s economic growth in the second quarter turned out to be higher than the expectations of the majority of economic analysts, and all political parties tried to take credit for the 2.8 percent increase compared to the same quarter last year. However, Eurostat’s comprehensive comparative review of seasonally adjusted data, according to which Croatia’s second quarter GDP was just 2 percent higher than last year, only confirmed that the actual picture is far from impressive, reports Poslovni.hr on September 13, 2016.

GDP in the EU grew by 1.8 percent on average, and most countries in Central and Eastern Europe achieved similar or slightly higher growth rates. Thus, looking at the level of GDP per capita by purchasing power parity, Croatia has been overtaken by Romania, one of only two EU member states that had until recently been behind Croatia. After 4.2 percent growth in the first quarter, Romania in the second quarter recorded GDP growth of 5.9 percent. This means that its per capita GDP will increase from last year's 57 percent of the EU average to about 60 percent. Croatia last year stood at 58 percent of the EU average, and with the slightly above-average growth this year it would reach perhaps 59 percent. At the moment, the only country with lower GDP is Bulgaria which last year stood at 46 percent of the EU average, but whose GDP in the last four quarters grew at the rate of 3 percent.

In the last 10 years, Croatia practically has not moved an inch. In 2005, it stood at 58 percent of average of all EU member states, and after some good news in the pre-crisis period, the prolonged recession annulled all the progress. Therefore, at the end of 2015 Croatia was again in the same position as it was 10 years earlier. For comparison, Romania's GDP per capita ten years ago was far behind at 34 percent of EU average. Also, several transitional countries with similar or lower starting positions of development are today significantly ahead of Croatia. For example in these 10 years, the level of GDP in Slovakia climbed from 59 to 77 percent of the EU average, in Poland from 50 to 69 percent, in Estonia from 59 to 74 percent, and in Hungary from 62 to 68 percent. Slovenia has not progressed much, but its starting position was far better so even today it is at 83 percent of EU’s GDP.

And that is not all. The level of public debt in Croatia during this period has more than doubled, from 41 percent to last year’s 86.7 percent of GDP. In most of other countries the debt is at lower levels.

Regarding convergence trends during individual governments, only during the first term of government led by Ivo Sanader (2003-2007) did Croatia more or less follow its peers. From 2008 onwards, Croatia has gradually fallen behind other EU states. During the term of Zoran Milanović’s government (2011-2015), the GDP level compared to the EU slightly decreased (from 59% to 58% of the European average).