Publication: Croatia Systematic Country Diagnostic Update
Loading...
Published
2024-11-07
ISSN
Date
2024-11-07
Author(s)
Editor(s)
Abstract
Croatia is a high-income country with solid macroeconomic fundamentals, which has contributed to the country’s accelerated income convergence with the rest of the EU in recent years. The sustained inflow of EU funds, including from structural funds and NGEU, will continue to support relatively high growth over the next few years, but sustainable income convergence will hinge on addressing key structural constraints. Croatia is well positioned to achieve substantial progress on multiple fronts if it seizes the opportunities provided by macroeconomic and financial stability, green and digital transitions, and access to sizable EU funds. In addition to labor supply constraints, Croatia’s workface faces a relatively low skills base, calling for improvements in the country’s education, health, and social protection systems. An inadequate base of skills in the workforce also constrains Croatia’s long-term growth and productivity, the latter of which is expected to remain low absent reforms. Another potential constraint for sustainable growth is the slow progress on the green agenda. While Croatia’s greenhouse gas (GHG) emission levels have generally been falling, emission intensity remains significantly above the EU average. Additional efforts to lower GHG emissions are needed, especially in the transport, energy, manufacturing, and building sectors, which are currently the biggest GHG emitters in the Croatian economy. In terms of greening the energy sector, further improvements are constrained by insufficient investments in renewables, largely due to cumbersome administrative procedures. To address these constraints and seize the opportunities that lie ahead, this SCD Update lays out four broad outcome areas (High-Level Outcomes, or HLOs) that are required to achieve inclusive, resilient, and sustainable growth to improve the long-term wellbeing of people in Croatia.
Link to Data Set
Citation
“World Bank. 2024. Croatia Systematic Country Diagnostic Update. © World Bank. http://hdl.handle.net/10986/42378 License: CC BY-NC 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Albania Systematic Country Diagnostic(World Bank, Washington, DC, 2020-05-04)Since the first Systematic Country Diagnostic (SCD) was prepared in 2015, Albania has stabilized its macro-fiscal situation and improved GDP growth. The SCD Update aims to identify Albania’s binding constraints for faster progress against the current political backdrop and on-going trends. The Update organizes the analysis around three Strategic Objectives and identifies corresponding priority policy areas to achieve sustained progress.Publication The Republic of Croatia Systematic Country Diagnostic(World Bank, Washington, DC, 2018-05-04)Croatia has made remarkable progress since independence, but daunting challenges impede the reforms required for sustainable development. In the space of a couple of decades since independence and its subsequent destructive war, Croatia has established a liberal democracy and a market economy, and achieved upper-middle income country. EU accession played a key role in these accomplishments by supporting legislative improvements, strengthening institutions and increasing the availability of funds. Nevertheless, implementation of the reform program continues to face significant obstacles. Capture of public institutions by powerful interest groups has limited the effectiveness of reforms. And frequent changes in government, each accompanied by changes in technical staff in public administration, have reduced momentum for reform and the consistency of government policies over time. This Systematic Country Diagnostic (SCD) provides an assessment of where Croatia stands in terms of poverty reduction and shared prosperity (namely the twin goals), and how it could maximize progress towards these goals. The SCD’s purpose is not to assess the Government’s development plans but rather to articulate an independent identification of, and rationale for, priorities for achieving the twin goals. The analysis is meant to inform subsequent engagement between Croatia and the World Bank Group on the Country Partnership Framework. The document is structured as follows: chapter two presents key determinants and constraints of growth; chapter three presents determinants and constraints for enhancing inclusion; chapter four discusses financial, social and environmental sustainability, and identifies key sustainability-related constraints on achieving the twin goals over the longer term; and chapter five presents the priorities for reform and concludes.Publication Systematic Country Diagnostic of the Philippines(World Bank, Washington, DC, 2019-11-15)This Systematic Country Diagnostic (SCD) identifies a four-part diagnosis of the constraints to the Philippines achieving its Ambisyon Natin 2040 goals. First, the country can enact policies that maintain its high rates of growth but also make that growth more inclusive and generate good jobs. Second, investments in human capital can ensure that Filipinos can lead healthy lives and have the skills for those jobs. Third, the Philippines can build its resilience to natural disasters and the looming climate crisis, while continuing to build peace in Mindanao. The common thread across all these challenges is the need for follow-through and implementation, which points to governance as the core cross-cutting challenge. The SCD addresses these thematic areas—inclusive growth and jobs, human capital, resilience, and governance—in turn.Publication North Macedonia Systematic Country Diagnostic Update(Washington, DC: World Bank, 2023-11-10)The 2018 North Macedonia SCD evaluated the country’s economic development and recognized its impressive progress in reducing poverty and advancing shared prosperity. Between 2002 and 2018, income per capita doubled, and the country rose from lower-middle-income to upper-middle-income status. In the wake of the global financial crisis, a sustained increase in the incomes of households in the bottom 40 percent of the distribution halved the headcount poverty rate to about 20 percent, and years of inclusive growth drove one of the world’s steepest declines in inequality. While this assessment was broadly positive, it also highlighted challenges that could make progress difficult to sustain unless structural reforms were advanced including within the European Union (EU) accession negotiations context. The SCD presented three complementary pathways for North Macedonia to achieve faster, more inclusive, and sustainable growth: (i) increasing productivity; (ii) enhancing job opportunities for all; and (iii) achieving sustainability through effective governance, fiscal prudence, enhanced environmental management and resilience to natural hazards. Five years later, these same pathways remain central to inclusive growth and poverty reduction in North Macedonia. North Macedonia envisions a future characterized by higher productivity and better paid jobs; enhanced infrastructure and public services that allow a more balanced regional development; a sustainable environment and higher resilience to shocks; and, ultimately, being a member of the EU. Unfortunately, the country lags on these aspirations and grapples with the pressing issue of population decline and emigration. Numerous factors contribute to the wave of emigration, encompassing political polarization, corruption, eroded trust in public institutions, perceptions of socioeconomic inequality, persisting intergenerational poverty, low-quality healthcare and education systems, and alarming levels of air pollution.Publication Indonesia Systematic Country Diagnostic Update(World Bank, Washington, DC, 2020-06-30)Since Indonesia’s first Systematic Country Diagnostic (SCD) in 2015, the economy has grown steadily, poverty has declined to an all-time low and incomes of the bottom 40 percent have climbed. This SCD Update identifies four pathways leading to shared prosperity via higher productivity and better jobs, equal opportunities and greater resilience. Indonesia has made some progress in reforms along each of these pathways, but many challenges remain to be addressed. The four pathways not only remain highly relevant in the context of the COVID-19 pandemic but accelerating progress has become even more urgent.
Users also downloaded
Showing related downloaded files
Publication Business Ready 2024(Washington, DC: World Bank, 2024-10-03)Business Ready (B-READY) is a new World Bank Group corporate flagship report that evaluates the business and investment climate worldwide. It replaces and improves upon the Doing Business project. B-READY provides a comprehensive data set and description of the factors that strengthen the private sector, not only by advancing the interests of individual firms but also by elevating the interests of workers, consumers, potential new enterprises, and the natural environment. This 2024 report introduces a new analytical framework that benchmarks economies based on three pillars: Regulatory Framework, Public Services, and Operational Efficiency. The analysis centers on 10 topics essential for private sector development that correspond to various stages of the life cycle of a firm. The report also offers insights into three cross-cutting themes that are relevant for modern economies: digital adoption, environmental sustainability, and gender. B-READY draws on a robust data collection process that includes specially tailored expert questionnaires and firm-level surveys. The 2024 report, which covers 50 economies, serves as the first in a series that will expand in geographical coverage and refine its methodology over time, supporting reform advocacy, policy guidance, and further analysis and research.Publication Lifelines(Washington, DC: World Bank, 2019-06-19)From serving our most basic needs to enabling our most ambitious ventures in trade and technology, infrastructure services are essential for raising and maintaining people’s quality of life. Yet millions of people, especially in low- and middle-income countries, are facing the consequences of unreliable electricity grids, inadequate water and sanitation systems, and overstrained transport networks. Natural hazards magnify the challenges faced by these fragile systems. Building on a wide range of case studies, global empirical analyses, and modeling exercises, Lifelines lays out a framework for understanding infrastructure resilience—the ability of infrastructure systems to function and meet users’ needs during and after a natural shock—and it makes an economic case for building more resilient infrastructure. Lifelines concludes by identifying five obstacles to resilient infrastructure and offering concrete recommendations and specific actions that can be taken by governments, stakeholders, and the international community to improve the quality and resilience of these essential services, and thereby contribute to more resilient and prosperous societies.Publication Global Economic Prospects, June 2025(Washington, DC: World Bank, 2025-06-10)The global economy is facing another substantial headwind, emanating largely from an increase in trade tensions and heightened global policy uncertainty. For emerging market and developing economies (EMDEs), the ability to boost job creation and reduce extreme poverty has declined. Key downside risks include a further escalation of trade barriers and continued policy uncertainty. These challenges are exacerbated by subdued foreign direct investment into EMDEs. Global cooperation is needed to restore a more stable international trade environment and scale up support for vulnerable countries grappling with conflict, debt burdens, and climate change. Domestic policy action is also critical to contain inflation risks and strengthen fiscal resilience. To accelerate job creation and long-term growth, structural reforms must focus on raising institutional quality, attracting private investment, and strengthening human capital and labor markets. Countries in fragile and conflict situations face daunting development challenges that will require tailored domestic policy reforms and well-coordinated multilateral support.Publication Women, Business and the Law 2023(Washington, DC: World Bank, 2023-03-02)“Women, Business and the Law 2023” is the ninth in a series of annual studies measuring the laws and regulations that affect women’s economic opportunity in 190 economies. The project presents eight indicators structured around women’s interactions with the law as they move through their lives and careers: Mobility, Workplace, Pay, Marriage, Parenthood, Entrepreneurship, Assets, and Pension. The 2023 edition identifies barriers to women’s economic participation and encourages reform of discriminatory laws. This year, the study also includes research, a literature review, and analysis of 53 years of reforms for women’s rights. Examining the economic decisions that women make throughout their working lives as well as tracking regulatory changes from 1970 to today, the study makes an important contribution to research and policy discussions about the state of women’s economic opportunities. By presenting powerful examples of change and highlighting the gaps still remaining, “Women, Business and the Law 2023” is a vital tool in ensuring economic empowerment for all. Data in “Women, Business and the Law 2023” are current as of October 1, 2022.Publication Romania Country Climate and Development Report(Washington, DC: World Bank, 2023-10-24)This report explores how climate action, in line with Romania’s goal of achieving net zero emissions by 2050, interacts with the country’s growth and development path. It further suggests priority actions to reduce carbon emissions and build resilience, while supporting inclusive economic growth and poverty reduction. This is the first Climate Country and Development Report (CCDR) to cover a European Union member state and a high-income economy.