Major Economic Differences Between Croatian Counties

Total Croatia News

Zagreb, Istria and Primorje-Gorski Kotar are far better off than the rest of the country.

At its latest session, the government has adopted the Regional Development Strategy for the period up until the end of 2020. The document provides for 32.26 billion kunas to be spent on overcoming regional differences and increasing the quality of life and competitiveness in all regions. Of the total amount, more than 15 billion kunas should come from European Union funds, reports Novi List on June 27, 2017.

However, it is not clear what new measures the state will undertake to reduce significant differences between individual regions, although the document covers as many as 325 pages. The government, for example, notes massive emigration of physicians from Zagreb and Primorje-Gorski Kotar counties and concludes that it is necessary to stop such trends, but does not say how it will do it. Or, for example, it states that the number of physicians and emergency medical services personnel in counties with a significant share of tourism does not correspond to the needs during the tourist season, adding that this situation needs to be changed, but does not say how it will do it.

Such broad statements cover the first half of the document, while the remaining 160 pages are full of annexes, mostly tables with statistical data which are in many cases, four or five years old.

However, perhaps the most interesting attempt that the Ministry of Regional Development and EU Funds has undertaken in the strategy is an attempt to calculate the fiscal capacity of individual counties, on the basis of their revenue and expenditure allocations in the state budget. The data shows that only four Croatian counties, including the City of Zagreb, are net payers into the state budget.

This means that more money is collected in their area than spent there in later redistribution. In addition to the City of Zagreb, this group includes Primorje-Gorski Kotar County, Istria County and Zagreb County. In other words, if these counties were states, they would have a budget surplus, while all others would have a deficit.

In Zagreb, more than 40 billion kunas is collected annually, while just 26 billion kunas is spent, which means that Zagreb contributes with more than 13 billion kunas to the state budget. In Primorje-Gorski Kotar County, 10.5 billion kunas is collected, and 9.8 billion kunas is spent.

The analysis of the fiscal positions of counties per capita shows that in Zagreb the state budget receives a net average of 17,200 kunas from each inhabitant. Second place belongs to Istria County, with an average surplus of 3,800 kunas per capita, followed by Primorje-Gorski Kotar County with a surplus of 2,500 kunas per capita. In other words, when it comes to Primorje-Gorski Kotar County, each inhabitant annually pays 35,616 kunas to the government and receives 33,142 kunas.

Such state of affairs is not surprising given that 18 Croatian counties have GDP per capita below the national average. That is a consequence of large differences between Zagreb compared to the other Croatian regions. GDP per capita in Zagreb is 77 percent higher than the national average. Only two other counties, Istria and Primorje-Gorski Kotar, also have higher GDP per capita than the Croatian average.

In Primorje-Gorski Kotar County, GDP is 26.2 percent higher than the national average, while in Istria it is 24.3 percent higher. On the other hand, Brod-Posavina County, Vukovar-Srijem County and Virovitica-Podravina County do not reach even 60 percent of the national average, which is somewhat above 10,000 euros.

In the strategy, apart from having the goodwill, the government has not identified any specific measures to reduce these differences, so it is expected that it will do so in laws which it should introduce once the Parliament adopts the strategy.


Subscribe to our newsletter

the fields marked with * are required
Email: *
First name:
Last name:
Gender: Male Female
Please don't insert text in the box below!

Leave a Comment