Learn Croatian: To je bio vrlo težak ekonomski problem. - That was a very difficult economic problem.

When pointing something out or introducing a general concept (like saying 'That was...' or 'This is...'), Croatian uses the default neuter pronoun to, no matter what the gender of the following noun is.

If the sentence starts with the neuter To, why is the past tense verb bio in the masculine form?

In sentences where to introduces a noun, the past participle of the verb biti (to be) agrees with the noun being described, not the introductory pronoun. Because problem is masculine, the verb becomes je bio instead of the neuter je bilo.

Why is the adjective težak used here rather than teški?

Težak is the indefinite form of the adjective, which is used here because we are talking about 'a' difficult problem rather than 'the' difficult problem. Note that ekonomski doesn't change because adjectives ending in -ski only have one form that acts as both definite and indefinite.