Croatia is a country in southeastern Europe, a member of the European Union since 2013.
The major sectors of the Croatian economy are shipbuilding, food processing, chemical industry, information technology, real estate services and tourism. Croatia is still recovering from the global financial crisis of 2008 with government bureaucracy, corruption, and high tax rates making the recovery process even slower.
The banking system of Croatia is characterized by relatively high concentration: competition between the major banks is making it difficult for other banks to compete. Another feature of the Croatian banking system is a prominent share of foreign capital (mainly from Austria and Italy).
1 EUR = 7.5493 HRK (2017-12-08)
During the last 11 years EURHRK exchange rate was within the range 7.1049 - 7.6975, reaching its maximum in Jan 2015 and falling to its minimum in Sep 2008.
Chart 1. Euro to Croatian kuna (EURHRK). Source: ECB.
|Nominal GDP (2016)||Nominal GDP per Capita (2016)||Real GDP Growth (2016)|
|45.6 bln EUR (+0.04%)||10 900 EUR (+0.05%)||2.9 % (2015: 1.6 %)|
According to Eurostat, nominal GDP of Croatia in 2016 was 45.6 bln EUR.
Croatia outperforms the European Union in terms of real GDP growth with the average annual differential coming to 0.1% over the past 10 years (2006 - 2016). In 2016 real GDP growth was 2.9% which was above the Euro Area average (1.8%) and above the European Union average (1.9%). Real GDP growth in 2017 - 2022 are IMF's estimates.
Chart 2. Real GDP Growth in Croatia. Source: Eurostat, International Monetary Fund.
In 2016, nominal GDP per capita in Croatia was 10 900 EUR.
Croatia has a below-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, fell behind that of the European Union by -36.5% over the past 10 years (2006 - 2016). GDP per capita at PPP in 2017 - 2022 are IMF's estimates.
Chart 3. GDP Per Capita at Purchasing Power Parity in Croatia; European Union = 100.
|CPI, MoM (Sep 2017)||CPI, YoY (Sep 2017)||CPI, Year Average (2016)|
|0.3 % (Aug 2017: 0.0 %)||1.6 % (Aug 2017: 1.5 %)||-0.6 % (2015: -0.3 %)|
According to Eurostat, inflation rate in Croatia in 2016 expressed as annual percentages of average consumer prices was -0.6% which was below the Euro Area average (0.2%) and below the European Union average (0.3%). Inflation rates in 2017 - 2022 are IMF's estimates.
Chart 4. Inflation Rate in Croatia. Source: Eurostat, International Monetary Fund.
|Unemployment Rate (2016)|
|13.3 % (2015: 16.3 %)|
|Government Bond Yield (Sep 2017)|
|2.71 % (Aug 2017: 2.87 %)|
Chart 5. Government bond yield of Croatia. Source: Eurostat.
|BB (speculative), outlook negative||Ba2 (non-investment grade speculative), outlook negative|
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Croatia signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Croatia signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
Croatia has signed bilateral agreements with 54 jurisdictions to automatically receive information:
Croatia has signed bilateral agreements with 65 jurisdictions to automatically send information:
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
|FATCA Status in Croatia|
|IGA in effect since 20 March 2015, Model 1|
Croatia has FATCA agreement with the U.S. in effect since 20 March 2015 (Intergovernmental Agreement Model 1). Financial institutions operating in Croatia are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Croatian financial accounts hold in U.S. financial institutions will be reported to Croatian authorities.
|Financial Market Development|
|3.6 (max 7.0), 95th out of 138 countries|
|4.9 (max 7.0), 69th out of 138 countries|
According to World Economic Forum's Global Competitiveness Report 2017-2018, financial market development in Croatia is scored 3.6 out of maximum 7.0 and ranked 95th out of 138 analysed economies, trustworthiness and confidence of financial market is scored 4.2 (78th place).
Chart 6. Financial Market Development in Croatia. Source: WEF.
Soundness of banks is scored 4.9 bringing Croatia into the 69th place.
Chart 7. Soundness of Banks in Croatia. Source: WEF.
|Maximum Protected Amount|
|100 000 EUR|
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in Croatia are summarised in Table 1.
|Scheme Participants||all credit institutions operating in Croatia (including branches of foreign banks), branches of Croatian banks abroad|
|Eligible Depositors||natural persons, small entrepreneurs and non-profit organisations|
|Covered Accounts||all deposits|
|Maximum Protected Amount||100 000 EUR|
|Paid In Currency||HRK|
Table 1. Deposit guarantee scheme in Croatia.
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
|Local Currency (Croatian kuna)||Foreign Currency|
|Baa1 (lower medium grade)||Ba3 (non-investment grade speculative)|
Local currency (Croatian kuna) deposit ceiling for Croatia is set to Baa1 (lower medium grade), foreign currency deposit ceiling is Ba3 (non-investment grade speculative).
|Average Deposit Rate (Aug 2017, HRK)|
|0.73 % (Jul 2017: 0.71 %)|
Chart 8. Deposit Rates in Croatia. Source: ECB.
|Number of Banks|
|Consolidated Assets (2016)|
|58 082.20 mln EUR (+0.86%)|
|Recent Changes (2016)|
|new banks: 0, closed banks: 1|
Currently there are 34 credit institutions operating in Croatia.
In 2016 consolidated banking assets in Croatia were 58 082.20 mln EUR. The consolidated banking assets' evolution is shown at Chart 9 below.
Chart 9. Consolidated banking assets in Croatia.
Recent structural changes (2013 - 2016) of the banking sector of Croatia are summarised in Table 2.
|Number of Opened Banks||0||0||0||0|
|Number of Closed Banks||0||2||0||1|
Table 2. Recent structural changes in the banking sector of Croatia.
All the credit institutions operating in Croatia can be classified into several categories. Table 3 summarises the number of banks in each category.
|Category||Number of Banks|
|Branches of foreign banks||1|
|Housing savings banks||5|
There are 1 branches of foreign banks from 1 different countries in Croatia. Table 4 shows the number of branches grouped by the country of origin.
|Country of Origin||Number of Branches|
|1||Zagrebacka Banka (UniCredit)|
|2||Privredna Banka (Intesa)|
|3||Erste & Steiermärkische Bank|
|4||Addiko Bank d.d.|
|6||Splitska Banka (Societe Generale)|
|7||Hrvatska Poštanska Banka (HPB)|