ECONOMY

After Slovenia, Croatia was the most developed republic of the former Yugoslavia. With substantial support and investment from abroad, the Croatian economy recovered well after the break up of Yugoslavia and several years of civil war. Industry is the most important sector in the economy, producing textiles, chemicals, processed foods, finished metal goods and construction materials. Agriculture, which produces maize, wheat and sugar beet, is important for domestic purposes but has never contributed significantly to the export economy. Mineral deposits of exploitable size include oil, coal and natural gas. Croatia also has an important tourism industry, based on the Dalmatian coast: after being all but wiped out by the civil war, it has recovered and prospered; it now accounts for about 15 per cent of GDP and has been largely responsible for Croatia’s recent economic progress. Annual GDP growth is around 4 per cent. After independence, the government introduced a program of privatization and other market reforms inline with those adopted throughout eastern Europe. Croatia joined the IMF in January 1993, the European Bank for Reconstruction and Development and the World Trade Organization. In May 1994, the Government introduced a new currency, the Kuna: low inflation has allowed the government to keep its value reasonably stable. The country’s most important trading partners are Germany, Italy, Austria, Slovenia and Bosnia & Herzegovina.