Croatia economy is service based with service sector accounting for 67% of total GDP. Industrial sector is dominated by shipbuilding, food processing and chemical industry taking a significant portion of Industrial output. Croatia’s largest companies are Agrokor, Ina, Pliva, Podravka, HEP, Vindija and Croatian Telecom. Industrial Sector represents 27% of Croatia’s total economic output and agriculture represents 6%.

Agricultural sector in Croatia started to thrive in recent years; exports of blue water fish experienced a surge in demand especially from Japan and South Korea. Croatia is a strong producer of organic foods and much of it as of late is being exported to EU as are Croatian wines, olive oils and lavender. Tourism is a notable source of income during the summer. With over 10.4 million foreign tourists each year generating a revenue of over 7 billion euros, Croatia is ranked as eighteenth most popular tourist destination in the world.

Trade is starting to play a major role in Croatian Economic Output. In 2006 Croatia exported goods in value of 10.4 U$ billion (FOB) (19.7 billion including service exports. The estimated Gross Domestic Product per capita in purchasing power parity in 2006 was cca. USD 15500 or 48.9% of the EU average for the same year.

Croatian preliminary GDP data for 2007, puts Croatian GDP at 68,208 billion USD, or just over 15,355 USD per head (Real income) putting Croatia ahead of EU member-states Romania and Bulgaria. The Croatian economy is post-communist. In the late 1980s, at the beginning of the process of economic transition, its position was favorable, but it was gravely impacted by de-industrialization, war destruction as well as losing the markets of Yugoslavia and the SEV.

Persistent economic problems still remain: unemployment (12.7% in 2005) and slow progress of economic reforms. Of particular concern is the heavily backlogged judiciary system, combined with inefficient public administration, especially issues of land ownership. The unemployment is very high in eastern parts of Croatia (Slavonia and Dalmatia), reaching 20% in some areas, and relatively low in larger cities, Istria, Kvarner, Zagreb-area, being under 7%. Unemployment has been constantly declining by 5% over the last 7 years.

The country has since experienced faster economic growth and has been preparing for membership in the European Union, its most important trading partner. In February 2005, the Stabilization and Association Agreement with the EU officially came into force and Croatia is advancing towards full EU membership. The country expects some major economic impulses and high growth rates in the coming years (currently Croatia suffers from high export deficit and considerable debt). Croatia is expecting a major boom in investments, especially greenfield investments.