This paper is organized into two components, which are a theoretical and practical part. The theoretical part includes the definition of demographic and economic factors that interact with each other, while the practical part shows the movement of these factors. Basic demographic factors include: natural population trends, age and gender structure, migration and educational structure. Economic factors represent basic macroeconomic components, which they are: BDP, unemployment and inflation. The paper shows how factors influence each other. It also represents an image of the current state of the economy and demography in the Republic of Croatia. According to the analysed data, the aim of this paper is to investigate which demographic policies and measured the state is undertaking to improve the demographic structure of the population. Therefore, such measures are presented in the last chapter, which also refers to the improvement of economic development. Data collected for research purposes are mainly collected from the annual reports of the Central Institute of Statistics and Population Censuses. Accordingly, this paper is based on relevant, and as much as possible, more recent sources.