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Privatization and the drive toward a market economy had barely begun under the new Croatian Government when war broke out in 1991. As a result of the war, the economic infrastructure sustained massive damage, particularly the revenue-rich tourism industry.[52] From 1989 to 1993, GDP fell 40.5%.[52] With the end of the war in 1995, tourism and Croatias economy recovered moderately.[52] However, corruption, cronyism, and a general lack of transparency stymied meaningful economic reform, as well as much-needed foreign investment.[52]Croatias economy turned the corner in 2000 as tourism rebounded.[52] The economy expanded in 2002, stimulated by a credit boom led by newly privatized and foreign-capitalized banks, some capital investment, most importantly road construction, further growth in tourism, and gains by small and medium-sized private enterprises.


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