Oliver Roehn
OECD Economic Surveys: Croatia 2026
Abstract
The economy has performed strongly despite consecutive external shocks. Economic growth is set to moderate amid supply constraints and high uncertainty. A return to fiscal prudence is needed to support the disinflationary process, rebuild fiscal buffers and prepare for medium- to long-term spending pressures. To ensure fiscal sustainability, reforms are needed to broaden tax bases, better target support for vulnerable households and raise spending efficiency, including by building capacity to regularly conduct comprehensive spending reviews, rationalising the public workforce and improving the governance of state-owned enterprises and infrastructure projects. Despite significant progress, further efforts are also needed to strengthen the anti-corruption and public integrity framework.
1.1.1. Economic growth is moderating but remains robust
After rapid GDP growth in 2024, growth moderated somewhat in 2025 amid supply constraints. In 2024, GDP grew strongly at 3.8%, primarily driven by domestic demand. Buoyant wage growth fuelled private consumption, while investment surged due to the accelerated use of EU Recovery and Resilience funds and continued earthquake-related reconstruction (Figure 1.1). Expansionary fiscal policy also fuelled demand. The strong post-pandemic performance has contributed to further convergence of living standards - as measured in GDP per capita - towards the OECD average (Figure 1.2). However, with growth above its potential rate for most of the post-pandemic years, a positive output gap emerged. GDP growth moderated somewhat in the first three quarters of 2025 but is still robust. Domestic demand remained the primary driver of growth. Household consumption decelerated, reflecting a moderation of disposable income growth and consumer boycotts of supermarkets and retailers over high food prices at the beginning of 2025. Investment growth remained strong thanks in part to the drawing of EU funds. Export growth was subdued partly due to a loss in price competitiveness in the tourism sector.
The labour market remains tight despite some signs of easing. Employment growth stayed strong throughout 2024 but moderated somewhat in the first half of 2025. With the working-age population declining, labour supply growth in recent years was supported by an improvement of the labour force participation rate, in particular of prime-age workers (25-54) and older women (55-64), increased immigration from non-EU countries and a further decline in the unemployment rate, which is at historically low levels (Figure 1.3). There are indications of a cooling labour market: job vacancies have fallen, and nominal wage growth has moderated, though it remains strong.
Inflation has slowed but remains elevated and higher than in most other euro area countries (Figure 1.4). Harmonised consumer price inflation (HCPI) fell from a peak of 13% in late 2022 to 3% in August 2024. Since then, inflation has picked up again, partly due to an acceleration in food price inflation, reflecting import price increases, but also domestic factors including increased labour costs and low productivity in agriculture. Food price inflation abated in the second half of 2025, and HCPI stood at 3.8% in December 2025. Strong wage growth and tourism demand continue to exert pressures on services inflation. Rapid private and public wage growth pushed up unit labour costs, which has only been partly mitigated by a reduction in profit margins. Tourism demand put pressure on service inflation particularly via hotel and restaurant prices (weight of 12% in HCPI), although less so in 2025 than in previous years. As a result, service price inflation remains high and sticky (Figure 1.4, Panel B). The national consumer price index, which excludes consumption of foreign tourists, stood at 3.3% in December 2025.
1. Including statistical discrepancy.
Source: OECD Quarterly National Accounts database; OECD Economic Outlook database.
GDP per capita, thousand USD PPP 2020
Note: 'Peers' is the unweighted average of Czechia, Hungary, Slovak Republic, and Slovenia.
Source: OECD Quarterly National Accounts; OECD Economic Outlook database.
Raising productivity growth is essential to maintain cost-competitiveness and sustain improvements in living standards in Croatia’s ageing society. Wage growth has exceeded productivity growth in recent years, raising concerns about the cost-competitiveness of the economy (Figure 1.5). The previous Economic Survey (OECD, 2023[1]) highlighted that a more favourable business environment requires improving regulatory processes, the judicial system, the governance of state-owned enterprises, addressing corruption, and better supporting research and development. As discussed in more detail in the sections below, Croatia has undertaken numerous reforms in these areas notably as part of its Recovery and Resilience Plan. If implemented effectively, these reforms should help boost productivity and growth (see also Table 1.4).
The direct impact of the recent trade tensions on the Croatian economy is limited. Yet, the country could be indirectly affected by weakening demand from European trading partners. Trade is closely integrated with the European Union (Figure 1.6): in 2024, about 65% of goods exports were directed to EU member states, while around 79% of goods imports came from the EU. In contrast, goods exports to the United States only account for 3% of total exports. Services represent around half of total exports, with travel services making up 65% of service exports.
Source: OECD Infra-annual labour statistics; Eurostat; Croatian Bureau of Statistics; OECD Economic Outlook database.
Note: All prices refer to harmonised index of consumer prices (HICP) except OECD. CEE euro area refers to the average of Estonia, Lithuania, Latvia, the Slovak Republic and Slovenia.
Source: OECD Consumer Prices Indices database; Eurostat.
Note: In panel A, 'Peers' is the unweighted average of Czechia, Hungary, Slovak Republic, and Slovenia. In panel B, an increase in the index indicates a real effective appreciation and a corresponding deterioration of the competitive position.
Source: OECD Productivity database; OECD Economic Outlook database.
1.1.2. Growth is set to moderate amid high uncertainty
Growth is set to continue to moderate but remain robust in 2026 and 2027 (Table 1.1). Private consumption growth will decelerate as wage growth moderates partly due to the fading effects of the public sector wage reform (see below). Investment growth will remain strong in 2026 but slow in 2027 as funding from the EU Recovery and Resilience Facility comes to an end, which will be only partly offset by stronger drawing of EU cohesion funds. After supporting growth in 2025, some fiscal stimulus will be withdrawn in 2026 and 2027, in line with the medium-term fiscal-structural plan. Trade restrictions and the erosion of price competitiveness in the tourism sector will weigh on exports, which will nevertheless strengthen as foreign demand gradually recovers. Easing demand and labour cost growth will support a gradual decline in core inflation, which will fall close to 2% at the end of 2027.
Risks are tilted to the downside. Escalating trade tensions could further dampen demand from European trading partners. High uncertainty could have a more adverse effect on investment and consumption. Potential supply bottlenecks in construction could delay the absorption of EU funds. Stronger than anticipated wage increases could add to price pressures and hurt exporters’ cost competitiveness. If fiscal policy remained expansionary in 2026 and 2027, this may slow disinflation.
Note: CEFTA (Central European Free Trade Agreement) countries are Albania, Bosnia and Herzegovina, Montenegro, Kosovo, Moldova, North Macedonia, Serbia.
Source: IMF, DOTS Database; UN Comtrade Database; OECD-WTO Balanced Trade in Services (BaTIS).
Annual percentage change, volume (2021 prices)
1. Contribution to changes in real GDP.
2. Harmonised consumer price index excluding food and energy, alcohol and tobacco.
3. EU Recovery and Resilience funds are excluded as positive revenue one-offs.
Source: OECD Economic Outlook 118 database.
1.1.3. Macroprudential policies have been tightened amid rapid credit growth
The financial sector appears resilient overall. Banks hold close to 70% of total financial assets, with foreign-owned banks (mostly from EU countries) accounting for around 87% of total banking assets. The five largest banks account for around 83% of total banking assets. Banking profitability remains high, notwithstanding some decline since the second half of 2024 on account of lower net interest income as interest rates started to fall. Capital and liquidity ratios well exceed their regulatory requirements, and non-performing loan ratios, at 2.3% in the third quarter of 2025, are at historic lows (Figure 1.7). Stress tests suggest that banks are able to withstand a significant adverse macroeconomic shock, including related to a marked escalation of geopolitical tensions, with capital ratios remaining above regulatory requirements for all systemically important banks (HNB, 2025[2]). In September 2025, the HNB announced an increase in the countercyclical capital buffer from 1.5% to 2%, effective from January 2027.
Real house prices have increased rapidly in the past decade. Between the second quarter of 2015 and the second quarter of 2025, real house prices increased by close to 66% in Croatia compared to 34% on average in the OECD. In contrast to developments in most OECD countries, house prices continued to increase strongly after 2022. The strong growth reflects buoyant domestic demand, boosted by rapid income growth, policies supporting homeownership and ample liquidity in the banking sector, as well as increasing foreign demand. At the same time, the strong growth of household disposable income has mitigated adverse effects on affordability (Chapter 2). Structural and tax reforms can help alleviate imbalances in the property market. Recent property tax changes included the introduction of a recurrent tax on vacant buildings, which has the potential to mobilise unused housing supply. As discussed in detail in Chapter 2, further reforms are needed to streamline land use policy and administrative procedures to enhance the supply response to demand pressures, develop the rental market, as well as broaden the scope of the recurrent tax on immovable property to all properties and base it on regularly updated market values to reduce property price fluctuations.
In response to rapid household loan growth, the Croatian National Bank (HNB) introduced borrower-based macroprudential limits. Against the backdrop of strong economic and wage growth and increasing housing prices, household borrowing expanded strongly, at much faster rates than on average in the euro area (Figure 1.7, Panel C) (HNB, 2025[3]). The exposure of banks to housing loans has continued to increase, with housing loans accounting for around 25% of total loans. While the overall indebtedness of households is still internationally low, at 30.2% of GDP in 2024, new loans were disbursed with looser lending standards in 2024. For instance, the share of new housing loans with a debt-service-to-income (DSTI) ratio above 45% increased from around 28% in early 2021 to 38% at the end of 2024. This ratio fell to 31% by mid-2025 as interest rates decreased. Although the average loan-to-value ratio (LTV) for new housing loans did not increase in 2024 and first half of 2025, around 28% of new housing loans had LTV ratio values exceeding 90% in mid-2025. In response, the HNB introduced maximum DSTI limits of 45% for housing loans and 40% for non-housing loans, and LTV limits of 90%, effective from July 2025. The authorities should continue to closely monitor the risks stemming from rapid loan growth and stand ready to tighten macroprudential measures if needed.
Growth in loans to non-financial firms picked up strongly in early 2025. The strong growth was mainly due to lending to the construction and real estate sector but also a pick-up in lending to the manufacturing and trade sectors. The overall indebtedness of non-financial corporations (non-consolidated) has fallen in recent years and stood at 103% of GDP at the end of 2024 (EU average 129% of GDP). Good corporate performance, coupled with falling interest rates, has reduced short-term risks for non-financial corporations (NFC), with the non-performing loan ratio of NFCs declining to 3.7% in the third quarter of 2025. Nevertheless, heightened geopolitical and trade policy uncertainty pose risks. Moreover, credit risk is also related to developments in the commercial real estate market. Commercial real estate prices have increased strongly in recent years. The direct exposure of banks to companies in the construction and real estate sectors has risen to around 20% of total corporate loans. In addition, around 40% of corporate loans are secured by real estate. Hence, a downturn of the commercial real property market could put pressure on banks' balance sheets.
The authorities are taking steps to develop private capital markets. The previous Economic Survey noted that the financial system is heavily bank-based, with room to further develop market-based financing. In March 2025, the authorities adopted a Strategic Framework for the Development of the Capital Market in the Republic of Croatia 2025-30 and a detailed action plan. In August 2025, Croatia signed a memorandum of understanding with 7 central and southeastern European countries to develop a regionally integrated capital market with Zagreb as its main hub.
Note: In panel B, 2025 Q2 data for the OECD average is calculated on the basis of latest available quarter for the OECD countries, ranging from 2024 Q2 to 2025 Q2. In panel C, OECD average is calculated on the basis of available OECD countries and 'Peers' is the unweighted average of Czechia, Hungary, Slovak Republic, and Slovenia.
Source: OECD calculations based on IMF Financial Soundness Indicators database; ECB.
1.2.1. Ensuring fiscal prudence
An expansionary fiscal stance has raised demand and inflationary pressures. The strong growth in recent years would have been an opportunity to consolidate public finances and build fiscal buffers. However, fiscal policy loosened significantly in 2024 and 2025 relative to an already expansionary stance in 2023 (Figure 1.8). In October 2025, the government revised up the general government deficit target for 2025, to 2.9% of GDP, following a deficit of 1.9% of GDP in 2024. The 2024 and 2025 fiscal expansions were mostly driven by significant hikes in public sector compensations related to the wage reform (see below) and social benefits (e.g. pensions, child allowances), the extension of cost-of-living support measures (e.g. energy price caps) as well as revenue measures, such as increases in personal income tax allowances and reductions in the pension contribution base for low-income earners (see below). The fiscal loosening notwithstanding, public debt continued to decline and fell below the Maastricht threshold of 60% of GDP in 2024 and is estimated to have further declined in 2025, on the back of robust growth and elevated inflation (Table 1.1).
A tighter fiscal policy stance is warranted in an environment of elevated inflation and a sizeable positive output gap. This is especially important as fiscal policy is the main domestic macroeconomic stabilisation tool since Croatia joined the euro area in 2023. In December 2025, parliament approved a budget for 2026 that targets a general government deficit of 2.9% of GDP, unchanged from 2025. The estimated primary structural balance slightly improves, but the withdrawal of fiscal stimulus is very limited. A tighter fiscal policy stance would ease demand and inflationary pressures.
Phasing out broad-based cost-of-living support, especially price-based measures, should be a priority. Most OECD countries have already phased out energy support measures. A new cost-of-living aid package worth EUR 296 million (0.4% of GDP) was approved in early 2025 to support households and small and medium-sized firms, including an extension of energy price caps, one-off payments to pensioners and other vulnerable groups, and support for farmers and students. Another aid package was approved in September 2025, which extended most of the measures until March 2026 even as the overall support was scaled back (0.2% of GDP). Moreover, reduced VAT rates on energy (e.g. natural gas, wood pellets) were prolonged and the list of basic food and hygiene products subject to price caps was extended (from 30 to 70 in January and further to 100 in November 2025). The latest two cost-of-living support packages are the 8th and 9th, bringing the total cost of these packages since 2022 to over EUR 8 billion (9.7% of GDP). While the overall support has been scaled back over time and the latest packages contain some targeted income support for vulnerable households, they also maintain energy price caps (e.g. on electricity prices for households and small businesses). These caps together with temporarily reduced VAT rates for certain energy products are not well targeted to those most in need and run counter to environmental policy objectives (see Chapter 3). Price caps for retail gasoline and diesel were phased out in July, which is welcome. Moreover, the price caps for food and hygiene products, while not fiscally costly, should be abolished as they have potentially negative effects on supply and distort the level playing field as the price caps (for most categories) apply to at least one item (but not all) within a product category.
The government should specify consolidation measures to reach the medium-term fiscal targets, rebuild fiscal buffers and prepare for medium- to long-term spending pressures. Croatia’s medium-term fiscal framework is guided by European fiscal rules. As Croatia meets both the EU debt (60% of GDP) and the deficit (3% of GDP) criteria, the European Commission (EC) provided a “technical information” at the country’s request. In line with the technical information, the medium-term fiscal-structural plan aims to reach a primary structural deficit of 0.4% of GDP by 2028. This implies a consolidation need of around 1.8% of GDP between 2025-2028. Recent tax reforms (see below), which include measures that both raise and reduce revenues, are expected to contribute just under 0.1% per year to the consolidation efforts. Further measures needed to reach the fiscal targets have not been specified.
Note: The underlying fiscal balance excludes inflows of EU Recovery and Resilience funds as positive one-off revenues. The shaded area depicts forecasts.
Source: OECD Economic Outlook 118 database.
Long-term spending pressures, including from ageing, the green transformation and defence spending, are significant. The investment needs to reach climate mitigation and adaptation targets by 2030 are substantial (58% of 2023 GDP, see Chapter 3), although they will have to be predominantly financed by private investment, and public investment is partly financed by EU funds. The recent agreement related to new NATO targets also implies a need to increase core defence spending to 3.5% by 2035 (from around 2% currently) and additional investment in capabilities of 1.5%. Moreover, a larger part of public investment, which is largely financed through EU funds, will have to be financed from national sources in the future. Finally, population ageing will exert significant spending pressure. Until recently, spending related to pensions, health and long-term care was projected to remain broadly constant as a share of GDP between 2023 and 2070, mainly due to the declining expenditure on disability pensions (Chapter 4) (EC, 2024[4]). However, the parliament recently approved a pension reform aiming to improve the relatively low pension adequacy, which is estimated to increase pension expenditure by about 1 percentage point of GDP by 2040.
Without further measures to offset defence and ageing-related costs, public debt would rise to about 90% of GDP by 2040 (Figure 1.9, current policies scenario). Consolidation to reach the medium-term fiscal target, for example via the measures identified in Box 1.1, would stabilise debt at around 55% of GDP (Figure 1.9, fiscal rules scenario). Given that some of the savings associated with the measures identified in Box 1.1 only materialise in the longer term (e.g. pension reform to ensure pension sustainability), some sequencing of reforms will be needed to achieve a tighter fiscal stance in the short-term. For instance, the phasing out of ad-hoc and untargeted energy price support and broadening of the VAT base could be frontloaded. Accounting for the growth and revenue effects (through higher employment) of the structural reforms listed in Box 1.1, would bring debt on a downward trajectory (Figure 1.9, fiscal rules and structural reforms scenario).
Croatia has developed its medium-term fiscal framework and institutions, and these efforts should continue. The 2021 Budget Act raised the role of a medium-term perspective on budgeting, and the government’s fiscal strategy is published in the national medium-term fiscal-structural plan. An independent fiscal council, the Fiscal Policy Commission (FPC), assesses the reasonableness of the official macroeconomic and fiscal forecasts and provides a non-binding public opinion to which the government must respond. It also publishes ex-post evaluations of the government’s performance regarding compliance with fiscal rules, including whether fiscal risks are being adequately addressed. The FPC should continue to build capacity and play a stronger role in assessing fiscal risks such as contingent liabilities and long-term fiscal sustainability challenges, including analysis of ageing and climate costs. In addition, the authorities should strengthen their fiscal risk management framework, with regular assessments, reporting, and disclosure of fiscal risks, for example stemming from climate change (see Chapter 3) or state-owned enterprises (see below).
General government debt, as a percentage of GDP
1. The "Current policies" scenario is based on the OECD Economic Outlook 118 database until 2027 and the OECD Long-Term Economic Model thereafter. Increases in ageing related costs are not offset and based on the EU Ageing Report 2024 and the Ministry of Labour, Pension System and Social Policy.
2. The “Fiscal rules scenario” assumes that a structural primary budget deficit of 0.4% is reached in 2028 and maintained thereafter.
3. The “Fiscal rules and structural reforms scenario” assumes in addition higher real GDP growth of about 0.4 p.p. on average until 2040 compared to the baseline scenario as well as an improvement in the primary balance thanks to positive employment effects of the reforms outlined in Box 1.1.
Source: OECD Long-term Economic Model; EU Ageing Report 2024; Ministry of Labour, Pension System and Social Policy.
Table 1.3 presents estimates of the fiscal impact of selected recommendations. The results are indicative and do not allow for behavioural responses. Moreover, revenue gains from the recommended reform package via higher employment are not included.
Fiscal savings (+) and costs (-)
Table 1.4 quantifies the GDP impact of the main recommendations based on the OECD Economics Department long-term model.
Relative to baseline
Source: OECD Economics Department Long-Term Model.
1.2.2. Broadening tax bases and enhancing the efficiency of the tax system
Tax revenues as a share of GDP stood at 38.4% in 2024, above the OECD average (34.1% of GDP in 2024) but close to the European OECD countries average (37.4% in 2024). Indirect taxes generate a larger share of total revenues than in most OECD countries, while income taxes and property taxes make up relatively modest shares. While the tax structure is relatively conducive to growth, there remains ample room to broaden tax bases and reduce distortions.
Share in total tax revenues, % of total taxation, 2024 or latest available year
Note: The OECD and OECD Europe aggregates are an unweighted average.
Source: OECD Revenue Statistics database; OECD Environmental Related Tax Revenue Database (ERTR).
Tax reforms in 2024/25 have shifted the tax burden away from labour towards property. A major personal income tax (PIT) reform granted greater autonomy to local governments in setting income tax rates (see below), while also increasing both the basic and family-related personal income tax allowances, as well as raising the income threshold for the second tax bracket. On the social security side, the pension contribution base was lowered for low-wage earners in 2024. Beginning in 2025 exemptions for health insurance contributions for people under the age of 30 are being abolished. Moreover, a recurrent tax on immovable property was introduced for vacant homes and short-term holiday rentals. On the consumption tax side, reduced rates for certain fossil fuels used by households were extended, and the VAT registration threshold increased from EUR 40 000 to EUR 60 000. The overall revenue impact of these discretionary tax measures was negative in 2024, amounting to -0.4% of GDP. However, it is projected to turn positive in 2025 (+0.2% of GDP), and to remain slightly positive through 2028 (+0.1% of GDP) (MoF, 2024[5]).
There remains ample room to broaden tax bases. As recommended in the previous Survey, the tax administration published a list of tax expenditures for the year 2022. According to the report, tax expenditures amounted to around 4.2% of GDP in 2022. Reduced VAT rates accounted for the largest part of the forgone tax revenues (2.7% of GDP). The 2024/25 tax reforms have also further narrowed the tax bases for value added taxes, personal income taxes and pension contributions. The tax expenditure reports should be published annually and presented to Parliament together with the budget, accompanied by regular evaluations of the efficiency of tax expenditures in fulfilling their stated goals. For example, the net fiscal impact of the recently introduced five-year personal income tax exemption for returning Croat citizens, who lived abroad at least two years, should be monitored and evaluated, in particular to determine whether it leads to additional return migration or mainly supports migrants that would have returned even without the scheme (OECD, 2024[6]). Moreover, regular evaluations of tax exemptions are especially important given ongoing efforts to better target social benefits (see below), which may make some tax expenditures obsolete.
Broadening the VAT tax base could create fiscal space to lower the standard rate or enhance targeted transfers. Croatia’s standard VAT tax rate of 25% is higher than the OECD average (19.3%) (OECD, 2024[7]). In addition, two reduced rates—13% and 5%—apply to selected goods and services, and some items are fully exempt from VAT. The 5% reduced rate primarily covers food products, but it has also been extended to natural gas, residential heating, and firewood until 31 March 2026—measures that contradict environmental objectives (see Chapter 3). The 13% rate applies inter alia to accommodation services in hotels, which is unlikely to benefit low-income households. More broadly, VAT exemptions or reduced rates are inefficient and poorly targeted, benefitting all households, including the affluent. In addition, multiple VAT rates create opportunities for tax evasion through the misclassification of goods and services. Broadening the VAT base while lowering the standard rate could reduce these distortions and support more growth-friendly tax policy (Acosta Ormaechea and Morozumi, 2019[8]). Moreover, simulations for Croatia suggest that a revenue-neutral reform that replaces reduced VAT rates on basic foods with increased existing targeted transfers (e.g. the guaranteed minimum benefit) would lower poverty and inequality (Rubil, 2022[9]).
The impact of the personal income tax (PIT) reform on the finances of local governments should be closely monitored. Local governments (cities and municipalities) are responsible for carrying out tasks of local importance, including maintaining local roads and managing primary education, as well as primary healthcare (Table 1.5). Local governments retain 74% of PIT revenues, while counties retain 20% (6% are earmarked for subnational governments tasked with additional functions, such as primary and secondary education). This substantial allocation of PIT revenues to subnational governments is unusual compared to most OECD countries. As PIT revenues are strongly affected by the economic cycle, this may make subnational government revenues more vulnerable to economic conditions. Before the 2024 reform, the central government set two personal income tax rates of 20% and 30% and local governments could add a surcharge up to a certain limit. Since 2024, local governments determine the tax rates within prescribed ranges that vary with the size of the locality (Table 1.6). The minimum tax rates for both brackets were also lowered and the income threshold for the second bracket increased. The reform can deliver important benefits to cities and municipalities, for example by strengthening their fiscal autonomy and their capacity to support local economic development (OECD, 2024[10]). However, the government should closely monitor the effects of the reform on subnational budgets. In particular, it should ensure that the additional powers afforded to local governments to reduce PIT rates do not lead to a race to the lower bound of the tax rate range. This could further reduce revenue collection from PIT, which is already low (Figure 1.9), with negative effects on the overall progressivity of the tax system. It can also harm tax revenues of local governments, constrain their ability to provide adequate public services, and increase territorial inequalities. Compared to the situation before the reform, the majority of local governments has reduced their PIT rates. The average tax rates across all local governments fell slightly to 19.9% (from 20.8% in 2023) for the lower PIT rate and to 29.9% (from 31.2% in 2023) for the higher PIT rate.
Note: An * indicates that the county delivers the task when the local government considers that it lacks the administrative or financial capacity.
Source: (OECD, 2024[10]).
The tax burden on wage income is relatively low. Since 2015, the authorities have gradually introduced tax reductions on employment income by modifying tax bases, rates, reliefs and definitions of non-taxable income items. As a result, the average effective tax wedge for the entire population of workers declined from around 34% in 2014 to 29.8% in 2021 (Urban, 2023[11]). Personal allowances in the PIT system are relatively high, especially for families with children. For example, a one-earner family with two children only starts to pay income taxes above gross earnings of 110% of the average wage. For low-income earners, social security contributions, in particular the 20% contribution rate to the pension system, is the main component of the tax wedge. In 2023, the government reduced the pension contribution base for employees with gross salaries below EUR 1300 to increase the net salary of low-income earners. Yet, this also reduces contributions to the pension system, which already runs a significant deficit (see Chapter 4). As an alternative to the reduction of the pension contributions for low-income earners, the government could introduce an in-work benefit, possibly in the form of a refundable tax credit that partly offsets the employee social security contributions of low-income earners (Urban, Bezeredi and Bratić, 2023[12]). In-work benefits are operated in numerous OECD countries (e.g. United States, United Kingdom, Germany, France, the Netherlands). However, care is needed in the design of in-work benefits to target them to groups with the largest new employment potential, while limiting negative work incentives for existing workers (Allen et al., 2025[13]).
The generosity of the R&D tax allowance has been significantly increased. Research intensity and innovation capacity has improved since 2018, especially in the area of venture capital, and Croatia is considered a moderate innovator according to the European Innovation Scoreboard (EC, 2025[14]). Business R&D spending also increased markedly in recent years, but remains significantly below the OECD average (0.8% of GDP vs 2% of GDP in 2023). Croatia, like most OECD countries, uses a mix of tax relief and direct support (e.g. grants) to encourage business R&D and innovation. However, overall government support to business R&D is very low (Figure 1.11), and predominantly in the form of grants. In addition, the uptake of the R&D tax allowance has been very low (OECD, 2024[7]; OECD, 2023[1]). In response, at the end of 2024, the government significantly increased the generosity of the R&D tax allowance. Under the new regime, up to 400% of eligible project costs for basic research, 300% of eligible project costs for industrial research and 250% of eligible project costs for experimental development can be deducted from the tax base. In addition, the administrative burden for beneficiaries was reduced. Given the high generosity, the new scheme should be regularly reviewed to assess its effectiveness in stimulating additional R&D investment and proper administration should be ensured to avoid fraud or the deduction of non-eligible costs.
R&D tax incentives could be better targeted to young and small firms. Currently, Croatia does not provide specific tax advantages for start-ups or young firms. To make R&D tax support more accessible and effective for these firms, carry-forward provisions or cash refunds are crucial. Most OECD countries offering R&D tax incentives include refundable or equivalent incentives to accommodate firms with limited or no immediate tax liability. Croatia’s R&D tax allowance can be carried forward up to 5 years – a welcome feature - but this duration is shorter compared to countries such as Poland (6 years), Portugal (8 years), Spain (18 years), and the United States (20 years) (OECD, INNOTAX database). For young firms that may not generate taxable profits in the early stages of development, refundable credits can provide much-needed liquidity to support innovation activities. Countries such as Australia, Canada, Colombia, and the United States offer refundable R&D tax credits specifically targeted at SMEs and start-ups. OECD research indicates that firms’ responsiveness to tax incentives - measured by the additional R&D generated per unit of tax support - is nearly twice as high when refund provisions are available. Moreover, when R&D tax incentives are redeemable against payroll taxes and thus decoupled from a firm’s profit situation, their effectiveness can be up to three times greater (OECD, 2023[15]).
Direct government funding and government tax support for business R&D, as a percentage of GDP, 2023 or latest available year
Note: BERD stands for Business Enterprise R&D.
The efficiency and fairness of the property tax system can be further improved, as discussed in detail in Chapter 2. In 2025, Croatia introduced a new recurrent property tax targeting vacant and short-term holiday rental properties and increased the lump-sum tax on holiday rentals in highly touristic areas. The 2025 tax reform marks a positive step towards encouraging a better use of the housing stock, and reduced the tax advantage of short-term rentals. However, further measures are needed to increase the system’s efficiency, reduce distortions and improve fairness. In particular, the recurrent tax on immovable property should be extended to all properties and the tax based on regularly updated property values. In contrast, transaction taxes should be phased out on all real estate properties.
The taxation of environmentally harmful activities and unhealthy products can be further strengthened as discussed in detail in Chapter 3 and Chapter 4. For example, effective carbon prices should increase in sectors not covered by the EU trading scheme (EU-ETS) to ensure a more consistent pricing of carbon and cost-efficient emission reductions. The taxation of vehicles should also be adjusted reduce the share of high-polluting cars (Chapter 3). In addition, preventable mortality is high reflecting inter alia behavioural risk factors. This calls for higher taxation of unhealthy products such as alcohol, tobacco or sweetened beverages (Chapter 4).
The digitalisation of the tax administration continues. A comprehensive digital transformation of the tax administration's information system is being carried out, aimed at facilitating business operations for taxpayers and reducing their administrative burden. In 2025, the government approved a legal framework for the mandatory exchange of electronic invoices between businesses and real-time transaction reporting, effective from January 2026 (Fiscalisation 2.0). The aim is to enhance transparency, reduce tax fraud through real-time access by the tax authorities to invoice data, and ease administrative burdens through the elimination of paper documentation and certain tax forms, as well as enabling pre-filling of tax returns.
1.2.3. Enhancing the targeting and efficiency of public spending
Better targeting social spending and increasing the efficiency of public administration can help to improve fiscal sustainability. General government expenditure, at 48.1% of GDP in 2024, is higher than on average in OECD countries (42.6% of GDP in 2023) but somewhat below European OECD countries (49.3% of GDP). Given medium- to long-term spending pressures, the authorities should strive to identify potential areas for spending efficiency gains while prioritising growth-enhancing spending and ensuring an adequate social safety net. Reforms to address ageing-related spending pressures, such as ensuring pension sustainability and enhancing health care spending efficiency are discussed in Chapter 4.
Better targeting social spending while ensuring an adequate social safety net
Croatia has made significant progress in reducing poverty over the last decade but pockets of poverty persist. Robust economic growth has translated into fast reductions of abolute povery rates (World Bank, 2024[16]). Relative poverty rates remain somewhat above the OECD average and have been relatively stable over time. Yet, certain demographic groups remain highly vulnerable to poverty and social exclusion. This includes in particular the elderly, reflecting the low pensions of the current generation of seniors mainly due to short working careers as discussed in Chapter 4, the Roma community, people with low education and the unemployed. Geographically, the poverty rates are particularly high in Zagreb and in the northern regions (World Bank, 2024[16]).
Poverty could be effectively reduced by strengthening social safety nets. As analysed in the previous Survey, the impact of social transfers (excluding pensions) on poverty reduction is lower in Croatia than in most OECD countries and especially EU countries (see also (World Bank, 2024[16]; EC, 2024[17])). Croatia’s primary tool to support vulnerable households is the Guaranteed Minimum Benefit (GMB), an income- and asset-tested cash benefit. Households who receive the GMB are also entitled to a monthly housing cost allowance as a top-up, the level of which is set by local authorities. Local authorities also pay a number of different benefits to vulnerable households in cash or in kind, independently of the GMB, often on an ad-hoc basis and without systematic asset testing. Moreover, despite having been increased significantly in 2023, the adequacy of the GMB remains lower than in most OECD countries (Figure 1.12). To further reduce poverty, the authorities should accelerate efforts to increase the coverage and adequacy of minimum benefits. Moreover, better integrating different benefits, especially across different levels of government, could help improve the design of benefits to help avoid negative employment incentives.
The forthcoming Central Register of the Population has the potential to bridge data gaps needed to better monitor and target social benefits and its implementation should be prioritised. One important bottleneck to better monitor and target social benefits relates to the fact that Croatia lacks crucial information to construct household-level data—such as unique identifiers for apartments and information on household members (World Bank, 2024[16]). The population register is expected to fill these data gaps. If integrated with tax income data, it should enable the calculation of income per household member to better target social support measures to the most vulnerable households. Moreover, integrating household and income databases would enable the authorities to automatically assess elegibility to means-tested welfare benefits targeted at the household level, for which households currently have to apply, with the potential to increase the coverage of these benefits. However, when combining different datasets, privacy concerns need to be adequately addressed.
Guaranteed minimum income benefits, % of median disposable income, 2024 or latest available year
Note: The adequacy of minimum income benefits measures the income of jobless families relying on guaranteed minimum income benefits as a percentage of the median disposable income in the country. Housing supplements are included subject to relevant eligibility conditions.
Source: OECD Benefits, Taxes and Wages database.
Making the most of spending reviews
The government has developed its capacity to conduct spending reviews. Spending reviews are a widely used tool in OECD countries to systematically evaluate existing expenditures, improve programme effectiveness, and support reprioritisation. In 2021, the government established a dedicated unit within the Ministry of Finance (MoF), which also issues an annual implementation plan and appoints a working group that includes staff from the MoF and other relevant institutions, depending on the area under review. To date, spending reviews have been relatively narrow, covering less than 5% of total public spending. Expanding their scope could help identify overlaps and interactions between programmes within broader policy areas such as welfare or defence. While more comprehensive reviews may require additional resources, they offer greater potential for identifying efficiency gains. One particularly useful focus for future reviews could be a functional assessment of the public sector workforce, as discussed below.
The government should continue efforts to institutionalise spending reviews. The OECD Best Practices for Spending Reviews (Tryggvadottir, 2022[18]) emphasise the role of political leadership ensure sustainability and cross-ministerial cooperation. Political commitment can be strengthened if line ministries are allowed to retain a portion of the identified savings to fund new priorities (Tryggvadottir, 2022[18]). Spending reviews should be systematically integrated into the budget and medium-term frameworks. For example, in Denmark the government decides on reviews early in the year to inform budget negotiations in June. A key challenge in Croatia remains limited human resources and capacity within ministries, which can hinder implementation of recommendations. It is crucial to build capacity across the Ministry of Finance and line ministries, and to establish robust monitoring mechanisms. In the United Kingdom for example, the Treasury is responsible for overseeing the implementation and monitoring potential risks through regular engagement by the Treasury’s spending teams with line Ministries. Finally, since performance indicators are vital for effective spending reviews, efforts to enhance performance budgeting should continue, alongside providing ministries with guidance on setting high-quality indicators.
Rewarding skills in the public sector while rationalising the workforce
The new public sector wage system is an important step to increase transparency, and to attract and retain skilled workers, if implemented effectively. The previous Economic Survey identified skill shortages in the public sector as a barrier to delivering public goods and services or implementing reforms (OECD, 2023[1]). In 2024, as part of the Resilience and Recovery Plan, the government introduced a new centralised recruitment system that is underpinned by a new competency framework. The new framework aims to encourage vertical and horizontal mobility of civil servants and simplifies the wage system by introducing a single grading structure to address the previous salary fragmentation. The new legislation also puts a stronger focus on skills and competencies when considering recruitment and promotion and provides performance-based pay for top-performing public servants. The new system should help retain and attract high-quality public servants. Given the significance of the change, the reform needs to be flanked by training for human resources units in line ministries to apply the competency framework. To maintain depoliticised selection procedures for top civil servants, a formal entity could be established to oversee the recruitment of senior civil servants across the administration.
The impact of the new wage reform on the wage bill needs to be carefully monitored, and further efforts are needed to rationalise the public workforce. Both the number of public servants relative to the size of the population and the overall wage bill as a share of GDP are higher than in most OECD countries (Figure 1.13). Wage growth in the public sector has been buoyant since 2022, and the recent public sector wage reform has added to wage pressures in 2024 and 2025. For example, the public sector wage bill increased from 11.3% of GDP in 2023 to 12.8% of GDP in 2024. This may reflect to some extent a welcome narrowing of the gap in compensation of comparable skills between the private and public sector (OECD, 2023[1]). Nevertheless, the application of the new salary framework should also be carefully monitored to ensure that pay raises are used effectively to attract and retain needed skills, and not lead to overall pay increases. In addition, the authorities should conduct a functional review with the aim to rationalise the public sector workforce. One driver of the relatively high number of public sector employees could be related the relatively high territorial fragmentation, with an average number of inhabitants per municipality of only 6 976 compared to an OECD average of 10 016 (OECD, 2024[10]).
Source: OECD calculations based on OECD National Accounts database and OECD Economic Outlook database; OECD National Accounts at a glance database.
Better governing state-owned enterprises
State-owned enterprises (SOEs) still play an important role in the economy. In 2021, workers in SOEs accounted for around 4% total employment (or around 7% when also accounting for firms at the sub-national level), and assets were worth around 45% of GDP, much higher shares than most OECD and peer economies (OECD, 2023[1]). SOEs under central government ownership are active in many sectors with particularly large shares of employment in transportation, electricity and gas, telecommunications, construction and finance. The ownership model differs across SOEs. For the 36 enterprises of “special interest”, the line ministries exercise state ownership functions while the Ministry of Finance (since February 2023, before Ministry of Physical Planning, Construction and State Assets) has a coordination role and focuses on monitoring SOE performance and management. For the rest of the (mostly minority-owned) enterprises, ownership rights have been vested in the Centre for Restructuring and Sale (CERP) with a view to their privatisation and restructuring. In late-2025, CERP’s portfolio comprised 125 enterprises, of which 13 were fully or majority-owned by the state. Some of these SOEs operate in sectors that are inherently competitive (e.g. hotels).
SOEs appear to underperform. As discussed in detail in the previous Survey, the performance of SOEs, as measured by their return on equity for example, lags compared to other firms in the same industry and compared to SOEs in peer countries (OECD, 2023[1]; OECD, 2021[19]). While SOEs financial performance weaknesses may be due to their obligation to serve public policy objectives, SOEs without those objectives also record relatively weak performance (OECD, 2021[19]). In addition, SOEs underperformance often extends to delivering on their public policy objectives. As low productivity SOEs retain workers and capital that the private sector could potentially use more productively, the privatisation or restructuring of SOEs that are not of “special interest” should continue, especially in sectors that are inherently competitive. For other SOEs, it is key to strengthen their corporate governance, especially to reduce undue influence for political or private gains (OECD, 2023[1]).
OECD Indicators of Product Market Regulation (PMR), quality and scope of public ownership, index scale of 0-6 from least to most restrictive, 2023
Source: OECD 2023-2024 PMR database (December 2025).
A new law was approved by Parliament in July 2025 to improve the governance of SOEs and align it with the OECD Guidelines on Corporate Governance of SOEs. On the basis of the new SOE law an ownership policy document is to be adopted, which should clearly define the rationale for the state-ownership of companies. Further implementing regulations are planned to set goals and performance indicators for each SOE. According to the new SOE law, the appointment of management and supervisory board members is to be professionalised and at least one-third of members of supervisory boards have to be independent. The Ministry of Finance’s coordination role will be strengthened. It will review SOE performance objectives and participate in the government’s selection process for members of the board of directors of SOEs. It will be important to clearly separate the government’s role as an owner and regulator of markets SOEs operate in, as foreseen in the new SOE law.
Improving infrastructure governance
Large inflows of EU funds call for continued efforts to strengthen public investment management. Combined support from the Recovery and Resilience Facility (RRF) and the EU cohesion funds up to 2026 and 2027, respectively, amount to around 24% of 2023 GDP compared to around 5% in the average EU country. Progress in implementing the Recovery and Resilience Plan (RRP) has been rapid. By the end of December 2025, Croatia had received EUR 4.7 billion in grants (82% of the total) and EUR 1.66 billion in loans (39% of total) from the RRF, corresponding to the fulfilment of 236 milestones and targets (58% of total). The fast progress was helped by a specialised implementation structure, including a steering and an implementation committee that coordinate and monitor progress, and identify and address impediments, together with high-level political support (OECD, 2023[1]). Nevertheless, challenges linked to the size of the plan and absorption capacity remain, especially since investments are concentrated towards the end of the implementation period (EC, 2024[17]). Initial progress towards the implementation of the EU 2021-2027 cohesion funds has been slower, with around 15.2% of the allocated funds spent by the end of October 2025 (EU average 16%). The authorities should draw on the effective practices supporting the implementation of the RRP to better prepare and track projects and improve coordination between the different levels of government.
Despite significant progress, Croatia’s infrastructure governance can be further enhanced. While several sector-specific strategies exist and are coordinated, there is no overarching long-term national infrastructure plan. Such a plan would help establish a more nationally driven development agenda to complement the European-level reform programmes that currently dominate Croatia’s priorities (OECD, 2023[1]). Since 2023, the Ministry of Finance has mandated systematic, analytical appraisals of national and sub-national infrastructure projects. Pre-investment studies must demonstrate alignment with strategic plans and include information on performance indicators, risk management and funding. Large and medium-sized investment projects are required to undergo cost-benefit analyses (CBA), following provided guidelines. These CBAs should account for all costs throughout the project lifecycle, including operations, maintenance and decommissioning. Expanding cost-benefit analysis to smaller projects could further improve decision-making, with the level of analysis adjusted to the project’s scale and risk. Additionally, while asset maintenance and monitoring practices are well established in the transport and water sectors, they should be extended to other critical infrastructure areas, particularly energy, health and education.
1.2.4. Strengthening the anti-corruption framework
Government transparency and low levels of corruption are key to boosting public-sector efficiency, as corruption can divert public resources from productive spending. The perception of corruption among citizens and businesses remains very high. In 2025, 92% of survey respondents considered corruption widespread in Croatia (EU average 69%; Eurobarometer 561, 2025). Among businesses, 90% of firms consider corruption widespread (EU average 63%) and 60% consider that corruption is a problem when doing business (EU average 35%; Eurobarometer 557, 2025).
Croatia has undertaken significant efforts to improve its anti-corruption framework in recent years, including new legislation on conflicts of interest, lobbying, the protection of whistleblowers and amendments to the law on access to information. The implementation of the Prevention of Corruption Strategy 2021-2030 and its first action plan for 2022-2024 has progressed well, with 83% of activities completed. A second Action Plan for 2025-2027 was adopted in May 2025. The 2024 law on lobbying defines restrictions on lobbying activities and sets rules on the verification, enforcement and penalties for violations of the law. An electronic lobby register was also established (EC, 2024[20]). Codes of ethics are in place at almost all levels of the administration. The authorities are also continuing to raise awareness about the new whistleblower legislation, including through trainings for judges and prosecutors and a guide on whistleblowing. In October 2025 the parliament adopted amendments to further strengthen whistleblower protection, including by increasing penalties for retaliation. In January 2024, Croatia became a party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The government has raised awareness of the Convention, the export credit agency has enacted an Ordinance to implement several anti-foreign-bribery measures, and Croatia has repealed a dual criminality requirement for the money laundering offence (OECD, 2024[21]). In October 2025, the parliament adopted amendments to the Act on the Office for the Suppression of Corruption and Organized Crime (USKOK), ensuring proactive investigation and prosecution of foreign bribery (including expeditious court proceedings).
The authorities should consider engaging non-governmental stakeholders in consultations of evaluation reports on the anti-corruption framework and making these reports publicly available with a view to strengthen transparency and visibility of anti-corruption efforts. The Ministry of Justice, Public Administration and Digital Transformation publishes annual monitoring reports on the implementation of the strategy and conducts internal evaluations on implementation. The evaluation of the Strategy will be conducted by independent experts, but the results are not made public and non-governmental stakeholders are not consulted. This potentially undermines public accountability and the credibility of anti-corruption and integrity efforts. It may also contribute to higher perceptions of corruption as the public is not informed about the government’s anti-corruption initiatives (OECD, 2025[22]).
A robust framework on the prevention and management of conflicts of interest is in place but oversight on post-public employment activities of officials in at-risk positions could be enhanced. The Act on the Prevention of Conflict of Interest includes some restrictions that prevent office holders from taking employment with a legal entity they dealt with or supervised for 18 months. However, these apply only to managerial positions and are not extended to employment in other positions (e.g. of an advisory nature) that may cause possible conflicts of interest (GRECO, 2024[23]). The Commission for the Resolution of Conflict of Interest (CRC) is the body responsible for monitoring compliance with post-public employment rules, but the authorities are not tracking post-public employment activities of public office holders (OECD, 2025[22]). The lack of data makes it difficult to assess whether rules on revolving doors are being observed (OECD, 2024[24]). In line with good practice from countries such as Switzerland, Israel, Finland, Norway and Latvia, the government should consider monitoring post-public employment activities of public officials in at-risk positions to strengthen enforcement of post-public employment rules.
Stronger mechanisms are required for the verification of asset declarations. Croatia publishes asset declarations of public officials, but data regarding the verification of these declarations is limited. Collecting information on the verification rate of declarations could help the Commission for the Resolution of Conflict of Interest (CRC) to better monitor compliance with relevant regulations and the overall efficiency of its activities, as is done for example by the French High Authority for Transparency in Public Life (HATVP). According to the OECD Public Integrity Indicators, the CRC primarily conducts formal compliance controls on the submission of declarations and their completeness. In case of non-compliance with asset declaration rules, the CRC has the power to investigate and impose sanctions on public officials with the exception of municipal council members. The law requires that verification procedures are conducted for every declaration received. However, this is neither realistic nor desirable, also considering the CRC’s limited capacities. In light of these limitations, the authorities could strengthen the asset declaration system by empowering the CRC to investigate and sanction violations for all public officials required to declare and by introducing risk-based verifications.
The government strengthened the independence and integrity of the justice system. Recent amendments in 2024 and 2025 to the Law on Salaries and Entitlements of Judicial Officials increased their salaries with a view to strengthen financial independence. Notwithstanding these efforts, some risks have been identified regarding the de facto integrity and independence of judges and prosecutors. In particular, a 2022 legal reform introduced regular security checks (“vetting”) for all judges and state attorneys. International organisations raised concerns that these checks could impede judicial independence as they would be carried out by the National Security Agency, a body in the executive (Venice Commission, 2022[25]) (European Commission, 2022[26]). In 2023, the Constitutional Court deemed the relevant legal provisions on security checks of judges unconstitutional. In October 2025, the parliament adopted amendments to the Law on the State Attorney’s Office to remove the legal basis for periodic security checks on all state attorneys. The parliament also adopted amendments to the Courts Act, which strengthens the legal framework related to judges and state attorney’s accountability and improves the performance appraisal system for judges.
Note: Panel B shows the point estimate and the margin of error.
Source: Panel A: Transparency International; Panels B: World Bank, Worldwide Governance Indicators; Panel C: OECD Public Integrity Indicator database.
References
[8] Acosta Ormaechea, S. and A. Morozumi (2019), “The Value Added Tax and Growth: Design Matters”, IMF Working Papers No 2019/096, https://www.imf.org/en/Publications/WP/Issues/2019/05/07/The-Value-Added-Tax-and-Growth-Design-Matters-46836.
[13] Allen, C. et al. (2025), and Possible Impacts of an In-Work Benefit Scheme in Greece, https://www.newsit.gr/wp-content/uploads/2025/03/commission-greece-meleti.pdf.
[27] EC (2025), 2025 Rule of Law Report - Country Chapter Croatia, https://commission.europa.eu/document/download/920cc4c5-ceef-4072-9d5c-95ef1bba1f78_en?filename=15_1_63948_coun_chap_croatia_en.pdf.
[14] EC (2025), European Innovation Scoreboard 2025: Country profile Croatia, https://ec.europa.eu/assets/rtd/eis/2025/ec_rtd_eis-country-profile-hr.pdf.
[4] EC (2024), 2024 Ageing Report. Economic and Budgetary Projections for the EU Member States (2022-2070), https://economy-finance.ec.europa.eu/publications/2024-ageing-report-economic-and-budgetary-projections-eu-member-states-2022-2070_en.
[17] EC (2024), 2024 Country Report - Croatia, https://economy-finance.ec.europa.eu/document/download/0aa0e1a7-e869-483b-b9b1-513d7df3040e_en?filename=SWD_2024_611_1_EN_Croatia.pdf.
[20] EC (2024), 2024 Rule of Law Report: Country Chapter on the rule of law situation in Croatia, https://commission.europa.eu/document/download/9abb25c0-0dfe-4006-8753-257844de834e_en?filename=27_1_58065_coun_chap_croatia_en.pdf.
[26] European Commission (2022), 2022 Rule of Law Report Country Chapter on the rule of law situation in Croatia, https://commission.europa.eu/document/download/a8d52e13-da5b-48b5-b93b-1201cc0b4bf9_en?filename=27_1_194032_coun_chap_croatia_en.pdf.
[23] GRECO (2024), Fifth Evaluation Round: Preventing corruption and promoting integrity in central governments (top executive functions) and law enforcement agencies, Second Compliance Report: Croatia, https://rm.coe.int/grecorc5-2024-4-final-eng-2nd-compliance-report-croatia-public/1680b0808e.
[2] HNB (2025), Financial Stability Report 26, https://www.hnb.hr/analize-i-publikacije/redovne-publikacije/financijska-stabilnost.
[3] HNB (2025), Macroprudential Diagnostics March 2025, https://www.hnb.hr/en/analyses-and-publications/regular-publications/macroprudential-diagnostics.
[5] MoF (2024), National medium-term fiscal-structural plan 2025-2028 (in Croatian), https://economy-finance.ec.europa.eu/document/download/8578b1ae-578a-47ac-ad63-07923401e144_hr?filename=national_medium-term_fiscal-structural_plan_croatia_hr.pdf&prefLang=en.
[22] OECD (2025), OECD Public Integrity Indicators - Croatia, https://oecd-public-integrity-indicators.org/countries/HRV/1000053.
[24] OECD (2024), Anti-Corruption and Integrity Outlook 2024, OECD Publishing, Paris, https://doi.org/10.1787/968587cd-en.
[7] OECD (2024), Consumption Tax Trends 2024: VAT/GST and Excise, Core Design Features and Trends, OECD Publishing, Paris, https://doi.org/10.1787/dcd4dd36-en.
[21] OECD (2024), OECD Anti-Bribery Convention Phase 2 Report on Croatia: Implementing the Convention and Related Legal Instruments, Implementing the OECD Anti-Bribery Convention, OECD Publishing, Paris, https://doi.org/10.1787/675b0561-en.
[10] OECD (2024), Towards Balanced Regional Development in Croatia: From Strategy Design to Implementation, OECD Multi-level Governance Studies, OECD Publishing, Paris, https://doi.org/10.1787/3c0779cf-en.
[6] OECD (2024), “Why do OECD countries offer tax relief programmes to attract foreign migrants and returning nationals?”, OECD Migration Policy Debates No 35, https://www.oecd.org/en/publications/why-do-oecd-countries-offer-tax-relief-programmes-to-attract-foreign-migrants-and-returning-nationals_5a23e2a3-en.html#abstract.
[1] OECD (2023), OECD Economic Surveys: Croatia 2023, OECD Publishing, Paris, https://doi.org/10.1787/4f945053-en.
[15] OECD (2023), “The Impact of R&D tax incentives: Results from the OECD microBeRD+ project”, OECD Science, Technology and Industry Policy Papers, No. 159, OECD Publishing, Paris, https://doi.org/10.1787/1937ac6b-en.
[19] OECD (2021), OECD Review of the Corporate Governance of State-Owned Enterprises: Croatia, Corporate Governance, OECD Publishing, Paris, https://doi.org/10.1787/b4a46863-en.
[9] Rubil, I. (2022), “Distributivni učinci ukidanja »socijalno motiviranih« sniženih stopa PDV-a radi povećanja izdašnosti i obuhvata ciljanih transfera: mikrosimulacijska analiza za Hrvatsku”, Revija za socijalnu politiku, Vol. 29/2, pp. 129-161, https://doi.org/10.3935/rsp.v29i2.1953.
[18] Tryggvadottir, Á. (2022), “OECD Best Practices for Spending Reviews”, OECD Journal on Budgeting, https://doi.org/10.1787/90f9002c-en.
[11] Urban, I. (2023), “Tax burden on labour income of young persons”, IPF Notes 128, https://doi.org/10.3326/in.2023.128.
[12] Urban, I., S. Bezeredi and V. Bratić (2023), “Changes to tax legislation in 2023”, IPF Notes 131, https://doi.org/10.3326/in.2023.131.
[25] Venice Commission (2022), Croatia: Opinion on the Introduction of Renewal of Security Vetting through Amendments to the Courts Act, https://venice.coe.int/webforms/documents/?pdf=CDL-AD(2022)005-e.
[16] World Bank (2024), Register-based Measurements of Poverty and Social Exclusion, https://hdl.handle.net/10986/42168.