Before the Covid-19 pandemic hit the globe, Croatia’s economy was experiencing almost 2.9% growth per annum. The GDP, as of 2020 stands at US$ 62B claiming 55th position in the world’s largest economy list issued by the World Bank.
During the past decade, the Foreign Direct Investment (FDI) in Croatia averaged Euros 355 million, which reflects the level of trust investors have in the economic and political system of the country. Therefore, despite the fact that the country’s economy has taken to a recent downward trend, economists and market gurus are optimistic about the future growth in various sectors of the economy and predicted a 19% growth in GDP by 2025.
Some key areas where individual investors and economically strong countries have their eyes are discussed here.
Information Communication Technology (ICT)
Croatia has a lot of potential in the ICT sector as a result of the government’s effort to digitalize the country. The market is yet unsaturated, and there is always room for innovation and modernization of the systems. The banking system of Croatia for instance is completely cloud-based; all data is centralized and accessible from anywhere in the world with strict security protocols. Similarly, farming and other such businesses that were previously lacking a digital footprint, modernized; such as managing the supply chain of a farm, etc.
The overall growth on average for the past five years has been close to 11% generating US$ 5B in revenues.
Housing & real estate
Despite unfavorable circumstances recently, the Croatian real estate market remains afloat. Pandemic, struggling economy and devastating earthquakes in Zagreb and the central region of the country did little damage to the property prices in the country. In fact, in 2020 the prices of houses rose by 3% on average.
Croatia’s second-largest port city, Split witnessed a rise of almost 4% per sq. ft. pricing of the property whereas the rise in Zagreb the country’s capital the rise was 9%. It is safe to say, therefore, that the time is ideal for investing in the Croatian real estate market.
Automobile industry
Croatia has long been famous for metal processing, plastic & glass production, and engineering. As of 2020 statistics to the national statistics bureau, 11,000 people are employed in the automobile industry alone. Considering that the total population of Croatia is 4.5millon, this is a significant contribution to the job market.
In August 2021 the Croatian car manufacturer Riman Automobili launched the world’s fastest supercar which runs completely on electricity, reaching the top speed of 168 km/h. The car is designed and manufactured in Croatia from scratch. Similarly, automobile giants such as FIAT, BMW, Ford, etc., rely heavily on parts and other automobile components designed and manufactured in Croatia.
If you happen to have an innovative idea and are capable to amass the appropriate funding, Croatia is ripe for the opportunity to manufacture and export high-tech electric vehicles at a competitive cost.
Tourism industry
Another sector that drives the Croatian economy is tourism. More than 115,000 are directly or indirectly associated with the travel and tourism industry in the country. The country offers something for all kinds of tourists; food lovers, architecture and heritage travelers, cultural aficionados, and health fanatics.
The hotels are cheaper than elsewhere in Europe and so are the food and traveling. Hence, various international chains of hotels and resorts have established 4 and 5-star hotels and resorts in tourist destinations of Croatia; among these are Kempinski, Hilton, Sheraton, Regent, etc.
Investing in Croat
For foreign investors, the first step toward investing in Croatia is to contact the Internationalization Division of the Croatian Chamber of Economy. The forum serves as a centralized platform for information, execution, and market connectivity through its affiliation with various chambers in the country.
The Chamber is also responsible to assist investors through legal compliance and advisory as well as advising on the best available areas to invest.
