The city of Gospić is the largest city in Croatia since it covers an area of 969.20 km2 and it is also an urban, economic, social and developmental center of Lika-Senj County. However, it is inhabited by only 0.3% of the total population of Croatia and because of its poor development it belongs to smaller mid-sized towns. According to the development index, Gospić is ranked third in the development group with a ratio of 88.66% according to the average of the Republic of Croatia. Areas used for agriculture and forestry cover 93% of the land area within the whole territory. The analysis of exploitation of development potentials shows that they are poorly valorized which is why there is no economic growth and development of the City. Human potential represents a key developmental constraint since the area is affected not only by intense depopulation but also by negative natural growth rate and a high rate of population aging. The results of the research on the causes of the young population’s migration indicate that young people are dissatisfied with living in the City. The proportion of young people who want to move out permanently is 0,17<P<0,23. In order to stop these negative trends and stimulate economic growth and development of Gospić, it is necessary to initiate the valorization of comparative advantages by stimulating the development of continental tourism, agriculture and the wood sector. Furthermore, future human resources are a serious constraint. For this reason, in order to stimulate population revitalization, it is necessary to develop a set of measures that lie within the competence of local self-government.