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The outlook for Croatia’s economy is positive. But the main risk to growth stems from the strong expansion in domestic credit and the growing external indebtedness of corporate and commercial banks. These may have a negative effect on the already high foreign debt levels in Croatia.
Croatia faces important challenges to prepare for accession to the EU. These include the restructuring and privatisation of industries which benefit from generous government subsidies. Small scale privatisation - including the tourism sector - needs to be completed. Further reform is required to improve the effectiveness of the judiciary and to reduce corruption. And significant levels of investment are needed in public infrastructure.
The EBRD and Croatia
The Bank will place the highest priority on regional support for Croatian corporates, commercial finance of national and municipal infrastructure, SME finance and tourism.
In the enterprise sector, the Bank will focus on privatisation and restructuring of state-owned companies, including in the tourism sector.
In the infrastructure and environment sector, the Bank will work with local, national and regional authorities to develop infrastructure projects at these levels.
Developing the financial sector will include providing SME finance with the support of the EU under the EU/EBRD SME Finance Facility.
Last updated 21 April 2010