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Croatia has an economy based mostly on various services and some, mostly light industry. Tourism is a notable source of income. The Gross Domestic Product per capita in purchasing power parity terms for 2002 was USD 9,800 or 42.7% of the EU average.

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.

Croatia is inhabited mostly by Croats (89.6%). Minority groups include Serbs (4.5%), Bosniaks (0.5%), Hungarians (0.4%) and others. The predominate religion is Catholicism (87.8%), with some Orthodox (4.4%) and Sunni Muslim (1.3%) minorities.

Curiously enough, the Croats were never obliged to use Latin - rather, they held masses in their own language and used the Glagolitic alphabet. This was officially sanctioned in 1248 by Pope Innocent IV, and only later did the Latin alphabet prevail. The Latin Rite prevailed over the Byzantine Rite rather early due to numerous interventions from the Holy See.

The Illyrian movement was rather broad in scope, both nationalist and pan-Slavist. It would eventually develop into two major causes:

Croatia has a mixture of climates. In the north and east it is continental, Mediterranean along the coast and a semi-highland and highland climate in the south-central region.

The recession that began at the end of 1998 continued through most of 1999, and GDP in 1999 was flat. Inflation remained in check and the kuna was stable. However, consumer demand was weak and industrial production decreased. Structural reform lagged and problems of payment arrears and a lack of banking supervision continued.