As Poslovni Dnevnik writes, preparations for Croatian Eurozone accession have already started, and one of the measures is to ensure that prices don’t increase significantly, which is something most people fear when asked what their worries surrounding the process of phasing out the Croatian kuna is.
Tihomir Mavricek pointed out that this will be among the very first things that will be tackled, and that the fixed exchange rate will be determined just before the decision of the EU Council on the introduction of the euro as Croatia’s official currency.
“It will be around 7.53, but it will finally be determined in May or June next year and will become valid from January the 1st, 2023. Until December the 31st, 2022, the commercial exchange rate will be valid, it’ll be as we have it now,” he explained for HRT.
“There’s no need to be afraid of price increases”
Many people are afraid of price increases as a result of Croatian Eurozone accession, but Mavricek has assured that the practice of countries that have already adopted the euro has shown that the replacement of the national currency has had very little effect on price growth, ie inflation.
“The countries that first adopted the euro had a small so-called harmonised growth of the consumer price index, which ranged between 0.09 and 0.28 percentage points. Countries that later adopted the euro had one which stood at around 0.3 – so we don’t expect any significant impact on prices, maybe of some 0.37 percentage points, with the biggest impact coming from services and a slightly smaller number of commonly used products, such as pastries and newspapers,” said Mavricek.
After the introduction of the euro in neighbouring Slovenia, prices in transport, restaurants and hairdressing/beauty salons increased, while in Slovakia the prices of food and construction works increased.
“Research has shown that these increases mostly regard products that don’t affect people with lower incomes when compared to those with higher incomes, such as sectors like accommodation services, restaurants, and sports services – these are usually services used by people with higher incomes,” explained Mavricek.
For more on Croatian Eurozone accession, check out our dedicated politics section.
