In her keynote speech at the opening of the three-day 12th international academic symposium "Challenges of Europe" in Bol on the island of Brac, the president underscored some of the positive trends such as growing employment, a rise in the tourist trade, a record low deficit, a declining public debt and a rise in capital investments.
The challenges to the structure of our economy and the demographic trends are interlinked and should be viewed as a whole, she said.
Grabar-Kitarovic said the structure of the Croatian economy was too concentrated on the domestic market, as result of which exports made up only 26% of GDP in 2016, markedly less than in other European Union member states.
Some parts of Croatia are growing, while others are faced with demographic fall and continued economic decline, she said.
There is no highly developed economy with tourism as the main industry and we should strive for doubling the tourism revenues, but halving its GDP ratio by developing other industries, the president said.
According to her, it is not possible to change the structure of the Croatian economy without dealing with the demographic difficulties. She mentioned a 2016 International Monetary Fund study on the Eastern Europe exodus, according to which Croatia lost 15% of GDP growth between 1993 and 2013 because of the emigration of experts with university degrees.
This is a clear sign of how the latest emigration wave, which began after Croatia joined the EU, will impact our economy. It could annul not only our positive economic trends but also a big part of our potential for growth and development, the president said.
In order to avoid that, we need to simplify doing business, notably in strategic industries, popularise STEM and research and development programmes, and improve the education system, she added.
The three-day Challenges of Europe conference brought together over 300 participants from Croatia and abroad who will discuss the importance of innovation for competitiveness. One of the participants is French researcher Jean Tirole who won the Nobel Prize in Economic Sciences in 2014.