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After the collapse of socialism , Croatia went through a process of transition to a market-based economy in the s, but its economy suffered badly during the Croatian War of Independence. Croatian economy was badly affected by the financial crisis which, together with slow progress of economic reforms, resulted in six years of recession and a cumulative decline in GDP of Croatia formally emerged from the recession with 3 continuous quarters of GDP growth in Q4 0.
A declining unemployment rate together with a strong tourist sector—supported by important investments to expand tourism capacity—should continue to underpin consumer spending in Growth is set to remain robust and broad-based in However, economic activity is expected to lose some of its momentum over the next two years and the volume of GDP is only set to return to its precrisis level in The potential negative impact on growth of the ongoing Agrokor restructuring is still looming.
The unemployment rate is set to continue falling, albeit at a slowing pace as employment growth and outbound migration ease. The general government deficit is projected to remain stable, but with the economy still growing above its potential, the structural balance is set to deteriorate. Food processing and chemical industry also account for significant portions of industrial output and exports.
Tourism is traditionally a notable source of income, particularly during the summer months, but also more recently during the winter months as well, due to an increase in popularity of snow sports such as skiing. Croatia is ranked among the top 20 most popular tourist destinations in the world, and was voted world's top tourism destination in by Lonely Planet.
Trade plays a major role in Croatian economic output. According to Healy Consultants, trade in Croatia is bolstered by its low trade-weighted average tariff of just 1. During the 19th century the Kingdom of Croatia had a high ratio of population working in agriculture. Many industrial branches developed in that time, like forestry and wood industry stave fabrication, the production of potash, lumber mills, shipbuilding. The most profitable one was stave fabrication, the boom of which started in the s with the clearing of the oak forests around Karlovac and Sisak and again in the s with the marshy oak masses along the Sava and Drava rivers.