Croatian stock market sees unprecedented boom

Over the last two years, the Croatian stock exchange (CROBEX) has seen a drastic boom in activity.

Izvor: DPA

Wednesday, 01.08.2007.

11:02

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Croatian stock market sees unprecedented boom

One of the most impressive success stories is that of Croatian Construction Minister Marina Matulovic, who in five years has made close to 3.35 million dollars, which is 50 times the amount she invested in shares of the Croatian Civil Engineering Institute (IGH).

A cleaning lady for IGH recently sold her company shares for nearly 247,000 dollars - 45 times her annual salary - local media reported.

Many, like Minister Matulovic, have taken advantage of the favourable conditions on the Croatian stock market, which have resulted for the most part from the country becoming a candidate for European Union membership in early 2005.

Croatia expects to become a fully-fledged EU member by 2009.

The country has stimulated economic growth by following the model of putting shares of its largest and most profitable companies on the market.

Late last year, shares of Croatia's largest oil company INA were put on the exchange and have doubled in worth already. The same is expected to happen with telecommunications giant T-HT.

According to its politicians, Croatia is emulating the model of the so-called Irish Miracle of the 1980s, when Ireland transformed itself from a country with a lagging economy and staggering unemployment rate to one of Europe's fastest-growing economies.

Most economic analysts in Croatia believe that it is on the right path to following the success of the Celtic Tiger, and predict that the improving economic trends would continue as Croatia edges closer to EU membership.

The country also expects an added boom in foreign investments, especially greenfield investments, as it continues along the path of European integration.

However, economic problems still remain, including double-digit unemployment rates and slow progress in economic reforms.

Especially legal issues regarding public administration and property ownership are a problem.

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