CROATIA ECONOMY AND REAL ESTATE INVESTMENT OVERVIEW

Croatian Economy

The country is economically sound and EU accession is set for 2008.The economy is a mixed one, with 30 per cent attributable to industry, 7.9 per cent to agriculture and 62.1 per cent to services, including tourism. The growth in GDP is 4.3 per cent per annum. The currency, the kuna, was formerly pegged to the deutschmark and now shadows the euro. It has been stable for several years.

Before the dissolution of Yugoslavia, Croatia, after Slovenia, was the most prosperous and industrialized area, with a per capita output perhaps one-third above the Yugoslav average. The economy emerged from its mild recession in 2000 with tourism the main factor, but high unemployment remains a key negative element.

Now, Croatia is on track to join the European Union and its foreign and economic policies are all tailored to achieving this as smoothly as possible. Many people, Croatians and foreigners, are investing in property here now, fully expecting the same rises in property values that were seen in other EU candidate states immediately prior to their accession.

Property prices in many of the new EU members country have seen considerable rises, the forecast is that for Croatia, that rise would be at a very high rate. After at, Croatia will be a new "European" rival of Spain, Italy, Portugal and Greece in the Mediterranean coast.

Accession to the EU in 2008 means that the outlook for the property market is very bright. However, the government has a heavy backlog of civil cases involving tenure land that must be dealt with.

BROKER, real estate agency team.