December the 24th, 2025 – Croatian National Bank governor Boris Vujčić has stated that growth in Croatia is expected to slow to 2.8% in 2026, with inflation likely to be at 3.1%.
As Jadranka Dozan/Poslovni Dnevnik writes, available indicators of Croatian economic activity over the last three months of the year suggest that after a significant slowdown in year-on-year growth in the third quarter. This is typically marked by the main summer tourist season, but the fourth quarter could once again be marked by acceleration.
Looking at the situation at the full-year level, the Croatian National Bank’s governor Boris Vujčić now expects real GDP growth of 3%, which is slightly lower than what was initially predicted three months ago (3.2%). One of the reasons for this correction is the downward revision of expected tourism revenues, both for this year and for the next two years to come.
Currently, less than 1% of their nominal growth is expected for 2025, which, considering inflation, means a concrete decline. The projections, at least according to Boris Vujčić, are that this year it will amount to around 15.1 billion euros. In any case, according to the central bank’s estimates, tourism revenues as a percentage of GDP (and) will fall over the next two years. The governor also revealed that compared to the September forecasts, the expected rate of economic growth for 2026 has been adjusted slightly downward, while the inflation rates, both for this year and for 2026, are slightly higher than the autumn forecasts suggested they’d be.
According to Boris Vujčić, in 2026, Croatian GDP growth is expected to slow down to 2.8%, and then to 2.6% in 2027. At the same time, inflation is expected to decline somewhat more slowly towards the target of 2%. According to the national index (IPC), this year’s acceleration to 3.7 percent was powered by faster-than-expected growth in energy and food prices.
“This is a consequence of the persistent pressure of the inflation rate across the service sector, with the fact that Croatia also experienced increased pressure on food prices. Some of that is a common issue for all countries, but some are specific to the Croatian market due to increased demand and growth in real incomes, which supported inflation,” Vujčić pointed out.
The central bank sees the average inflation rate sitting at just above 3% in 2026 (the forecast is currently 3.1%), while it should drop to 2.3 percent in 2027. Food prices should contribute to slowing overall inflation throughout 2026, but energy is also affected by the gradual abandonment of energy subsidies, i.e. administratively regulated prices for gas, electricity and heat.
As measured by the Harmonised Index of Consumer Prices (HICP), which is used in comparisons with other EU Member States, the inflation rate should drop from this year’s 4.4% to 3.4% in 2026. Given the economic forecasts for the entire Eurozone, where a real growth rate of 1.2% is expected in 2026 with inflation (HICP) of 1.9%, the latest forecasts from the Croatian National Bank indicate that the Croatian economy will continue to grow above the Eurozone average in 2026.
It should be kept in mind however that the inflation differential will still be present, although this gap should gradually narrow as time goes on. The main generator of GDP growth remains domestic demand, with a slowdown in real income growth and a less stimulating fiscal policy expected. This means that the contribution of both personal and government consumption and investment could also decrease compared to the high levels seen over the past two years.
The creation of between 40,000 and 50,000 new jobs per year, which we have seen in recent years, is no longer likely. In fact, 130,000 have been created in the past three years. Employment will continue to grow, Boris Vujčić pointed out, but at a slower pace in 2026, which could result in slightly more than 1.8 million employees by 2027. As general labour market growth slows, the pressure on wage increases, which have been growing very strongly in Croatia in recent years, should also decrease, but they have also had a stimulating effect on inflation overall.
Since 2020, wages in Croatia have increased by a somewhat staggering average of 60%, the governor noted. This year alone, wages have increased by 10%, which is the highest in the entire European Union. Their growth should slow down to 6% in 2026, and in 2027, these growth dynamics are likely to weaken further, dropping to around 4.5 percent, which will also contribute to the weakening of inflation.
