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By early 2005, the foreign debt of the Government declined in growth, and was surpassed in size by the foreign debt of the banking sector, prompting further interventions by the national bank.

Rapid industrialization and diversification occurred after World War II. Decentralization came in 1965, allowing growth of certain sectors, like the tourist industry. Profits from Croatian industry were used to develop poorer regions in the former Yugoslavia. This, coupled with austerity programs and hyperinflation in the 1980s, led to discontent in both Croatia and Slovenia that fueled the independence movement.

Western aid and investment, especially in the tourist and oil industries, is helping restore the economy. The government has been successful in some reform efforts — partially macroeconomic stabilization policies — and it has normalized relations with its creditors.

The governments of Austria and Hungary each tried to colonize Croatia over a period of several centuries: they imposed their languages on the Croatian people and settled many Austrian and Hungarian colonists in Croatia. Croatian romantic nationalism emerged to counteract the non-violent but apparent Germanization and Magyarization.

The most commonly accepted facts about the origin of the Croats are that they originate from Slavic tribes that lived in and around today's Poland. The early Croat people, as well as the Serb people, is believed to have been mixed Slavs and the Iranian-speaking Alans according to many modern scholars. It is unclear whether the Alans contributed much more than a ruling caste or a class of warriors; the evidence on their contribution is mainly philological and etymological.

In February 2005, Croatia implemented the Stabilization and Association Agreement with the EU and is advancing further towards full EU membership. The country expects some major economic impulses and high growth rates in the following next years (currently Croatia suffers most from its high export deficit and considerable debt).

The princes of Bribir from the Šubic family became particularly influential, asserting control over large parts of Dalmatia, Slavonia and Bosnia. Later, however, the Angevines intervened and restored royal power. They also sold the whole of Dalmatia to Venice in 1409.