Today, Croatia is economically stronger and more successful than ever before. With a projected GDP growth of 3.6% this year, it is well above the EU and Eurozone average of 1% or less, Prime Minister Andrej Plenkovic said in parliament on Tuesday.

Presenting a state of the nation report, he pointed out that Croatia’s GDP totalled 47 billion euros eight years ago and is expected to reach 84.7 billion euros by the end of this year.

Eight years ago, per capita GDP was 62% of the EU average, while it is expected to reach 78% by the end of this year. This puts Croatia ahead of Greece, Latvia and Slovakia, on a par with Hungary and approaching Poland and Estonia, Plenkovic said.

The goal is to reach a GDP per capita of 82-83% of the EU average by 2028, which corresponds to Portugal’s current level, he added.

Inflation, public debt and deficit within the Maastricht criteria

As outlined in a recently proposed budget revision for 2024, the deficit will remain below the authorised threshold of 3% of GDP at 2.6%, the public debt ratio will fall to 58.9% and inflation, public debt and the deficit will all remain within the Maastricht criteria, Plenkovic said.

He recalled the latest assessments by the rating agencies Fitch and Standard & Poor’s, which placed Croatia in the group of countries with a category A credit rating for the first time.

“The record-breaking rapid progress from non-investment grade to ‘A-‘ grade is a strong signal of security for foreign investors, Croatian companies and all of us. Our international reputation is strengthened. Favourable and cheaper loans are now an option,” he said.

Although he finds the ratings of these agencies flattering, Plenkovic said he was even more flattered by the fact that citizens have invested around 4 billion euros in government bonds.

The value of exports of goods has increased from 12.3bn euros in 2016 to 23bn euros, with exports to EU countries increasing by 90%, he said.

Plenkovic also spoke about the absorption of EU funds, noting that Croatia currently has a surplus of 16.2 billion euros in relation to its contributions to the EU budget. He recalled that Croatia, together with Italy, is the fastest absorber of funds from the National Recovery and Resilience Plan.

Energy crisis barely noticeable

With regard to the resilience of the economy, Plenkovic said that the crises had forced the government to adopt a policy of state interventionism. He referred to the numerous aid packages for households and companies, which totalled around 8 billion euros.

He emphasised that strong and timely measures had preserved social cohesion, so that the energy crisis was hardly felt.

He also pointed out that inflation is currently below 2%. “We have also tackled and solved this problem.”

Development of the transport infrastructure

Regarding the development of transport infrastructure, Plenkovic mentioned the completion of the Peljesac Bridge and named the completion of the Vc corridor in Baranja, the construction of motorways to Koprivnica and Virovitica, from Pozega to the motorway and the completion of the full-profile motorway to Dubrovnik as future goals.

He recalled the construction of the second tube of the Učka tunnel and emphasised the Kozjak tunnel and the Trogir-Omiš motorway as priority projects.

He also mentioned significant investments in rail transport and a “renaissance of harbours on the Adriatic”

Energy sector and agriculture

In the energy sector, Plenkovic recalled the increased capacity of the LNG terminal on the island of Krk, which now stands at 6.1 billion cubic metres of gas per year, and a 570 million euro investment in new, larger gas pipelines, which will also have the capacity to transport hydrogen.

He said that agriculture is the “backbone of an economically sovereign Croatia”, for whose development 3.8 billion euros in EU funds have been secured. The aim is to increase the value of agricultural production by a further 20%.