Names of mostly young people who went abroad in search for jobs are written on tiles of a bus station in Imotski, Southern Croatia. Youth unemployment rates went down from a record level of 50% in 2013 to 17% in 2019, and increased again to 22 % in 2020 because of the pandemic (EU27: 16%).
About the ILO in Croatia
Can a tourism-dependent economy rebound after Covid-19?
The three decades since Croatia’s independence in 1991 were turbulent. The country experienced a dramatic 30 per cent drop of GDP because of the war in the 1990ies. GDP only reached its pre-war level more than 10 years later in 2003. However, the unemployment rate remained high and labour force participation was low.
Croatia again was hit by an economic contraction because of the Great Recession. The economic crisis led to a 13% decline of GDP (2009-14) which was the second largest contraction in the EU after Greece. The unemployment rate doubled to 18% in 2014, and the youth unemployment rate increased to a record high of almost 50% (2013). EU membership supported the recovery (2015-19) which was robust and broad-based. However, Croatia is only slowly catching up with the rest of EU. The country’s GDP per capita stands at 65% (2019) of the EU average – only 5 percentage points higher than 10 years ago.
The Covid-19 pandemic hit the tourism-dependent economy particularly hard. Croatia faced a strong recession in 2020 with a decline of GDP of 8% (EU27: 6%). The European Commission forecasts a GDP growth rate of 5% for 2021, but recovery remains highly contingent on the lifting of travel restrictions and the pace of vaccination campaigns both in Croatia and in visitors’ countries of origin. Continue reading
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