Inflation continues to surge in Croatia

As expected by many, inflation in Croatia continues to rise coming in at 4.2% higher in September on an annual basis. While inflation based on an index of consumer prices harmonized with other EU countries the data is even worse, coming in at 4.6%. According to Eurostat data inflation in Croatia is among the highest in the Eurozone in September. Leading the growth in inflation are the service sector and food and drink.

While some argue that the recent government decision to slowly phase out its measures to help citizens and businesses deal with the negative impact of inflation - specifically subsidized electricity and natural gas prices - has had an inflationary effect, others argue that government’s intervention into the market was bound to cause a second, possibly more pronounced inflationary spike, as it disintermediated true price discovery.

According to economist Neven Vidaković, the data on the true effect of the phasing out of the government’s aid measures should be provided by the Croatian National Bank, which it is not doing. Here's how he commented on the September data: “This is nothing new. We have structural inflation, which is caused by a vulnerable economic structure. We have high economic growth which is the result of EU Funds, we are dependent on tourism, we cannot produce our own food, and therefore we have a high rate of inflation. Simply put, the structure of the economy is inflationary.”

In an almost karmic fashion, Vidaković’s claim that Croatia is far too reliant on its tourism sector was seemingly bolstered on Wednesday, as the Tourism Ministry presented the latest data from the sector based on figures provided by the Croatian National Bank. According to the ministry revenues from foreign tourists in Croatia increased by €244 million or 5.9% in the first half of 2025, to €4.375 billion. In the second quarter alone, revenues from foreign tourists amounted to €3.5 billion, which is 5.7% or €190.2 million more than in the same quarter last year.

Commenting on the data Tourism Minister Tonči Glavina said that he is satisfied with the results, and added that Croatia is strategically moving away from seasonality and is instead developing year-round tourism. He also noted that so far the post-season has seen an increase in tourist turnover of five percent higher, when compared to the same period last year. Glavina concluded by saying that price competitiveness remains a key priority for the sector.

None of this however, will help rectify the fact that Croatia - despite plenty of resources to do so, cannot produce what it eats.

Source: HRT