Published 16 June 2021
With funding by the European Union via the Directorate General for Structural Reform Support
Launch of the Review
Virtual event, 16/06/2021 - The review was released during a virtual event on 16 June 2021 in the presence of Mario Nava, Director-General of the Directorate-General for Structural Reform Support (DG REFORM) of the European Commission, Greg Medcraft, Director of the OECD Directorate for Financial and Enterprise Affairs, and Stjepan Čuraj, State Secretary at the Croatian Ministry of Finance.
About the Review
16/06/2021 - The recovery of the Croatian economy and its convergence of income levels towards more advanced European countries will largely depend on the extent to which long-awaited structural reforms can successfully enhance the business landscape. Drawing on experiences from important global developments in capital markets, the OECD Capital Market Review of Croatia offers policy recommendations to improve the legal, regulatory and institutional framework for capital markets in a way that will foster a resilient and dynamic business environment, help realise the potential of Croatian corporations and give households better opportunities to diversify their long-term savings.
After a period of weak economic performance following the 2008 global financial crisis, Croatia has experienced strong economic growth over the past five years up to 2019. Supported by ambitious reform initiatives, the country has been able to reduce its indebtedness and improve its public finances. However, as in other countries, the unprecedented economic shock caused by the COVID-19 crisis has disrupted this progress and resulted in a severe recession. In particular, many otherwise sound Croatian businesses are facing financial challenges caused by a sharp decline in revenues and tightened credit conditions.
Today, it is particularly important to ensure that the Croatian corporate sector has access to capital market financing in order to achieve a successful and sustainable recovery. Long-term market-based financing can help Croatian entrepreneurs reduce their reliance on short-term financing and match long-term investments with long-term patient capital. A more developed capital market will also provide households with better investment opportunities, allowing them to manage their savings and plan for retirement.
Against this background, the analysis and reform proposals in the review invite the Croatian authorities to consider reforms that will support further capital market development, with a view to supporting household savings, corporate investment, job creation and sustained economic growth.
This review was funded by the European Union via the Structural Reform Support Programme and implemented by the OECD, in cooperation with the European Commission’s Directorate-General for Structural Reform Support (DG REFORM).