Although EU membership is expected to have a positive impact on the Croatian economy, its contribution to growth will be nowhere near what other Central European countries have experienced in the past decade, analysts from Raiffeisen Austria emphasize in their latest monthly report.
They also note that the decisions of the courts and executive authorities made in the early days of Croatia’s EU membership do not contribute to the investment climate, and therefore do not expect investment growth in the short term. Analysts from the Austrian Raiffeisen Bank point out that Croatia joined the EU at a time when the Union is going through a second wave of recession, and therefore is unlikely to record growth in export demand or a significant influx of investments, which in the past enabled rapid economic growth for new members.
In financial markets, EU membership no longer guarantees reduced risk premiums, the analysts of that bank state. In the short term, the benefits for Croatia are likely to be less than the losses due to exiting CEFTA and the decrease in tourist arrivals from countries that are under visa regimes according to EU rules, they assess in Raiffeisen.
However, they expect long-term benefits for Croatia, primarily through increased sales of Croatian companies in the European market, and investments in the production of export goods and services. Additionally, analysts from that bank estimate that Croatia could now better leverage its geographical advantages in tourism and transport. Nevertheless, they see the greatest impetus for growth from strong pressure to implement structural reforms, primarily as a result of market opening and through EU institutions.
