In October 1993, the government adopted an ambitious three-phase program intended to stabilize the economy through fiscal stabilization, currency reform, and accelerated privatization. The plan, however, relies upon cooperation with international financial organizations.
Economic development has been closely tied with privatization. By 1995, the process of ownership transformation had been fully completed by 2,554 companies. There were 221 companies that had the two Croatian Pension Funds and Croatian Privatization Funds (CPF) as majority owners, and 1,225 companies having the same funds as minority owners. The CPF is legally obliged to offer the shares of its portfolio for sale at auction, and as a rule sells its shares through the Zagreb Stock Exchange. Continued liberalization is expected by the reformist government of Ivica Racan, who aimed in 2003 to speed Croatia's anticipated membership in the European Union. The national insurance, oil, and gas companies were planned to be privatized during 2002–03. Croatia is a member of the IMF, IBRD, and EBRD (as one of the Yugoslav SFR's successor states). Upon the outbreak of conflict in Yugoslavia, the United States suspended all benefits to Yugoslavia under the General System of Preferences, but benefits under this program were subsequently extended on 11 September 1992 to all the former Yugoslav SFR republics except Serbia and Montenegro. Despite the economic adversity, foreign investors have been keen to identify business opportunities in Croatia's relatively stable economy.
In February 2003, Croatia negotiated a 14-month, $146-million Stand-By Arrangement with the IMF to support the government's economic and financial program. Strong domestic demand and business and government investment contributed to a 5% real gross domestic product (GDP) growth in the first nine months of 2002, compared to 3.8% in 2001. The government deficit declined in 2002, and inflation fell. The currency remained stable as well. The public debt rose, however, to 57.5% of GDP at the end of 2002, up from 55% at the end of 2001. This general economic success was due in part to a good tourist season, and a large highway construction program, in addition to increased private consumption and rising investment.