Croatia’s investment momentum remains strong in 2024, but competitiveness challenges persist

• Croatia's economy grew steadily in 2024, supported by EU funds, the euro adoption, and financial instruments like EFSI and InvestEU
• Key barriers: 84% of Croatian exporters face differing EU regulations, digital adoption lags behind (62% vs. EU's 74%), and energy costs remain high.
• A conference jointly organised with the Croatian National Bank explored the EIB Investment Survey 2024 for Croatia and the EIB Investment Report 2024/2025, highlighting solutions such as market integration, green investments, and mobilizing private co-investors.

The Croatian economy kept the strong dynamic during 2024 after the rebound in 2022-2023. This was possible thanks to collective efforts by European Union Member States, the Recovery and Resilience Facility, EU funds and financial instruments like EFSI and InvestEU. Moreover, the euro adoption in Croatia represented a strategic shift and new business opportunities, driving the good investment momentum.

Nevertheless, in the new geopolitical context, in order to increase competitiveness, the urgency of further action is enhanced both for the EU as a whole and for Croatia. According to the new EIB Investment Report 2024/2025, the solution toolkit comprises: (1) unlocking business opportunities via market integration and simplification (2) leveraging European strengths such as green leadership and an inclusive social model (3) maximising the impact of public-sector intervention through targeted support, EU coordination and focus on incentives that mobilise private co-investors.

According to the latest EIBIS for Croatia, the business environment remains a concern. The availability of skilled staff, uncertainty about the future and energy costs remain the top three investment barriers while more than eight in 10 Croatian exporters (84%) report having to comply with different standards and consumer-protection rules across EU countries, above the EU average (60%). Moreover, there is a continued need of transformative investments as adoption of advanced digital technologies in Croatia is below EU peers (62% versus 74% respectively). Moreover, although most of Croatian firms (87%) have taken measures to reduce greenhouse gas emissions, in line with EU firms, there is still more to do for all EU countries. Croatian firms are also less likely than EU firms to have invested in sustainable transport options and energy efficiency.

At an event in Zagreb organised jointly with the Croatian National Bank (CNB), the European Investment Bank (EIB) today discussed the  EIB Investment Survey 2024 for Croatia  and key policy messages of the EIB Investment Report 2024/2025: Innovation, integration and simplification in Europe, focusing on the new insights on Croatian companies’ challenges and opportunities.

Opening remarks were made by EIB Vice-President Teresa Czerwińska, Croatian National Bank Governor Boris Vujčić and Deputy Prime Minister and Minister of Finance Marko Primorac. A presentation by Debora Revoltella, the EIB’s chief economist, assessed the state of the EU and Croatian economies through the EIBIS lens to understand their current performance, business prospects, concerns and enablers for a coordinated policy response.

Croatian National Bank Governor Boris Vujčić said: “Croatia and the whole of Europe have been facing major challenges in preserving competitiveness in an unstable global environment. In order for Croatian companies to be able to leverage growth opportunities, it is necessary to provide them with access to venture capital and alternative financing sources as well as to strengthen links between European capital markets. This conference provides us with an opportunity to jointly discuss present obstacles and new solutions for the financing of growth and innovations in order to ensure that the Croatian economy remains competitive in a rapidly changing world.”

EIB Vice-President Teresa Czerwińska said: “The EIB Investment Survey, conducted across all EU member states, provides a powerful policy tool to better understand the challenges and barriers, helping to create our strategy and to respond to the identified market gaps with targeted policy response. To address the gap of scale-up financing, the EIB Group provides a diversified type of financing for corporates: loans, guarantees, venture debt and private equity. For Croatia in particular, we reinforced during 2024 the innovation ecosystem with investments in equity funds through the Croatian Venture Capital Initiative 2 (CVCi 2) and the Croatian Growth Investment Programme II (CROGIP II), benefiting hundreds of startups and high-growth enterprises.”

“In the context of mounting pressure from international competition, Europe could reinforce its position as a global technology leader by focusing on three areas: market integration, simplification and large-scale investment in innovation,” said EIB Chief Economist Debora Revoltella “For large-scale investments for innovation and transformation, European firms need market scale to remain globally competitive. Larger and deeper capital markets are instrumental to mobilising higher-risk finance for innovation and the green transformation.”

The panel discussion in the second session of the conference, composed of representatives of the EIB Group and players in the local financial market such as the Zagreb Stock Exchange, the Croatian Financial Services Supervisory Agency (HANFA) and co-founders of innovative startups, discussed the availability of growth finance for Croatian firms, the role of the stock market, private equity funds and financial market integration and depth. Both the Croatian and the EU financial systems are still ill-suited to properly finance the green and digital transformations and the high-growth innovative segment, especially on the scale-up face. The European financial system depends heavily on banking and this focus continues to constrain specific investment as firms do not have many alternative funding sources to support risky investments, especially in the early stage of growth. Nevertheless, recent initiatives for alternative financing of Croatian firms are encouraging. Moreover, reducing the fragmentation of EU capital markets and simplifying regulation may offer a better and more productive use of Europe’s substantial savings.

Background information  

EIB 

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. Built around eight core priorities, we finance investments that contribute to EU policy objectives by bolstering climate action and the environment, digitalisation and technological innovation, security and defence, cohesion, agriculture and bioeconomy, social infrastructure, high-impact investments outside the European Union, and the capital markets union.  

The EIB Group, which also includes the European Investment Fund (EIF), signed nearly €89 billion in new financing for over 900 high-impact projects in 2024, boosting Europe’s competitiveness and security.  

All projects financed by the EIB Group are in line with the Paris Climate Agreement, as pledged in our Climate Bank Roadmap. Almost 60% of the EIB Group’s annual financing supports projects directly contributing to climate change mitigation, adaptation, and a healthier environment.  

Fostering market integration and mobilising investment, the Group supported a record of over €100 billion in new investment for Europe’s energy security in 2024 and mobilised €110 billion in growth capital for startups, scale-ups and European pioneers. Approximately half of the EIB's financing within the European Union is directed towards cohesion regions, where per capita income is lower than the EU average.

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