December the 19th, 2024 – Ongoing inflation in Croatia is causing back pockets and wallets to become thinner. With Christmas just around the corner, consumers are feeling the pinch.
As Poslovni Dnevnik writes, observed by the main groups of the ECOICOP classification on an annual basis, we get a better insight into spiralling inflation in Croatia. The highest average increase in consumer prices was achieved in the following groups: Restaurants and hotels (10.1 percent), Miscellaneous goods and services, (6.7 percent), Education (5.3 percent), Healthcare, (5.2 percent), and Food and non-alcoholic beverages (4.8 percent)”, the Central Bureau of Statistics (CBS) statement reads.
That being said, an annual price decline was recorded across three groups: Communications (6.4 percent), Transport (0.5 percent) and Clothing and footwear (0.1 percent). However, on a monthly basis, the highest average price increases were recorded in the following groups: Housing, water, electricity, gas and other fuels (2.1 percent), Clothing and footwear (1.6 percent) and in the groups Transport and Miscellaneous goods and services by 0.1 percent each. On an annual basis in the Eurozone, only Belgium had a higher inflation rate than Croatia, with an inflation rate of 5 percent.
is inflation in croatia affected by a mindset still calculating in kuna?
Economic analyst Petar Vušković revealed how he personally interprets this level of ongoing “toughness” of inflation in Croatia. To him, there’s a significant psychological element involved.
“Inflation is the curse of the economy, and consumers are put under a spell. Inflation isn’t only happening because of rising energy and housing prices, but mostly because of psychology. Psychologically, Croats are still adding up in the former currently. We look at the prices on the shelves in euros, and then mathematically convert euros into kuna. Of course, not all of us are good mathematicians, sometimes we round things up incorrectly in our heads. Traders use this market mirage, as I call it. It creates the illusion that everything is seven and a half times cheaper than before, but it really is not,” Vušković told N1.
Inflation in Croatia is also fuelled by high consumer spending. This was especially the case back at the end of November due Black Friday, as well as throughout December due to the Christmas period.
“Christmas Eve is on Tuesday, and we’ll spend five times more than we did last year”
Vušković noted that this year will be a record year in Croatia for personal spending, especially this festive season.
“For example, 15 percent more was spent on Black Friday than last year. This year, another important fact is that Christmas Eve falls on Tuesday, unlike last year when it was on Sunday. It’s expected that on that day alone, five times more will be spent than last year,” he revealed. Vušković also pointed out that a slowdown in inflation in Croatia should be expected next year.
“It’s estimated that in 2025, Croatian inflation will finally drop below 3 percent on an annual basis, which we haven’t seen for a long time,” he concluded.
