THE ANALYSIS OF AGGREGATE INVESTMENTS AND THEIR PERSPECTIVE, ESPECIALLY REGARDING THE USE OF EUROPEAN FUNDS

The purpose of this paper is to provide a detailed analysis of investments in Croatia in order to identify possible and desirable patterns of their trends in the post-crisis period. The importance of investments is reflected in an immediate impact they have on the increased capital accumulation, which is the key factor of economic growth. Investments played a key role in the pre-crisis economic growth, and should therefore be one of key elements of recovery and post-crisis growth. Moreover, the paper presents a detailed analysis of investment trends in Croatia during the period 2000-2009. Additionally, it presents a comparison of investment trends in Croatia against investment trends in new European Union member-states. Along with the overall investment trends, the structure of government and private made investments had also been explored, broken down by both business activities and technical structure of
investments. Investments have been observed relative to productive labour factor and their return in terms of gross value-added generated in order to gain insight into their effi ciency. Foreign capital infl ux had been analysed as an important determinant of investments. Although basic results point out that Croatia was not lagging behind the new member-states in terms of investment volumes, there still are substantial differences in terms of their structure and effi ciency. As compared with peer countries, government investments played a relatively more significant role in Croatia. As far as the role in economic growth is concerned, capital share stood at a relatively higher level in Croatia, whereas a high
level of investments made in individual industries was not justified through a growth in gross value-added. In conclusion, structural changes impose themselves as a precondition for increased investment efficiency and a signifi cant factor influencing the attraction of capital influx in the future. Given the reduced foreign capital infl ux during the period of economic crisis, it seems that a greater return on investment will be something sought for. Looking from such an angle, the European funds are becoming an extremely important and desirable source of funding the investment activities in Croatia in the forthcoming period.