Political instability in the first half of 2016, a fast economic growth which exceeded all expectations, a record breaking tourist season and a decline of public debt for the first time after so many years, are all the important elements which marked Croatia in 2016. 

At the beginning of 2016 several analysts estimated that the country’s economic growth would be 1,2 percent on average. However, the strong economic growth in the first nine months of 2016 made them revise the forecast up to 2,6 percent.

In the third quarter of 2016, GDP recorded an increase of 2,9 percent in comparison to the same period in 2015, i.e. a significant growth for the eight consecutive quarter. Since 2008 this was the fastest growth recorded due to the rising of personal consumption and a record breaking tourist season which once again proved to be the most important sector in the process of economic recovery.

Furthermore, the government also filled the budget by selling majority of the state shares in several companies, such as the Koncar Elektroindustrija company and the Imperial and Suncani Hvar hotels.
Since the budget had been filled well, the deficit was expected to be below the Maastricht criterion of 3 percent, for the first time since 2008.

However, the Standard & Poor’s rating agency as well as Fitch and Moody's, still keep Croatia's credit rating two grades below the investment level, but S&P believes that positive trends will continue in 2017 and that Croatia will exit the EU's excessive deficit procedure.

Both S&P and economic analysts noted that the second half of 2016 was marked by the recovery of political stability after the inauguration of the Andrej Plenkovic government.

"The year 2016 provided a good starting point for greater optimism as well as for the implementation of necessary reforms in 2017," said Zrinka Zivkovic Matijevic, the head of the Economic Research Department at the Raiffeisenbank Austria d.d. Zagreb.