14 February, 2022 - After meeting with the parliamentary opposition on Monday, the Bridge party announced that it was launching an interpellation on the government's work over rising energy prices.

"The Bridge group convened the meeting with the opposition to discuss certain proposals for an interpellation regarding the issue of energy," Zvonimir Troskot said, adding that there were several proposals and a final one hasn't been decided on.

Each parliamentary group presented short and long term measures to buffer inflation, he added.

Bridge believes that the government was not prepared for this crisis and that it is tardy in adopting measures to relieve the situation with rising energy and food prices. The party thinks that the focus should be on fiscal relief, by reducing VAT and abolishing excise taxes on fuel, and on social transfers, said Troskot.

"For months we have been pointing out the problem of inflation and increasing energy prices, and the government has done absolutely nothing about it, only saying that there won't be increases in gas prices before 1 April," he said.

Bridge also commented on the government's idea to tax Croatian residents working abroad, saying this was yet another blow to the weakest, aimed at filling the budget.

The Tax Administration is now targeting micro-enterprises and it's obvious that Finance Minister Zdravko Marić is trying to fill the state budget by hitting on the weakest, who could be the backbone of our economy, Bridge MP Nikola Grmoja said.

February the 14th, 2022 - The crisis surrounding rising energy prices across not only Croatia but the rest of Europe and indeed the world is continuing to throw proverbial spanners in the works for many and causing growing concern for companies and business. Croatian Government inflation measures are set to be rapidly introduced as a result of the spiralling situation which poses very little good for the domestic economy.

As Poslovni Dnevnik writes, at some point in the middle of next week, new Croatian Government inflation measures aimed at maintaining the standards of the country's residents due to high inflation, will be introduced. The move will now be being anticipated by many as the situation continues to unfold in a negative light.

RTL Television published the first hints about what these Croatian Government inflation measures might look like when they come into force:

Most of the measures are aimed at the most vulnerable people among us, therefore it has been announced that special vouchers to cover the difference in rising bill amounts will amount to more than 200 kuna at a time, and that they could also be extended to a larger circle of users during this inflation crisis.

The Prime Minister's Advisor for Economic Affairs, Zvonimir Savic, confirmed that there will be a reduction in the VAT rate, a topic which has been being talked about in many sectors for a very long time now. VAT on energy will be reduced, and state-owned suppliers will have to give up part of their earnings as a result of that.

However, it has not yet been decided whether these new Croatian Government inflation measures will reduce the VAT on gas down to 13 or a very welcome 5 percent.

On top of that, we do know that the tax placed on basic food products - eggs, flour, sugar, milk and the like - will be reduced from 13 to 5 percent.

For more, check out our dedicated politics section.

February the 8th, 2022 - Will Croatian restaurants be next in line to raise their prices as costs continue to increase in almost all sectors? Some claim they won't, but that answer might not be entirely honest...

As Poslovni Dnevnik writes, just about everything is becoming more and more expensive, and we'll all likely be paying more for holidays this year as well. The Family Accommodation Community, which brings together the owners of the popular ''zimmer frei'' brigade, estimates that prices will rise by an average of 10-20 percent. The head of that association, Marina Nimac Kalcina, is aware of how unpopular such announcements are, but, she says, that's the reality.

''Unfortunately, our economic situation is such that it will be a problem for some Croatian guests, but the season lasts only a few months, the costs are rising, and the hosts have to make a living from something,'' said Nimac Kalcina, revealing that the reservations being made by foreign visitors in January was almost like it was back in pre-pandemic 2019.

''If the coronavirus pandemic doesn't additionally complicate the situation, there are great chances for a good summer tourist season. With almost no interest in the pre-season, most reservations are for the summer months and there are also already some for the post-season. Money isn't as much of a problem for foreign guests, and according to some research, they're ready to spend more on holiday than they did last year. For Croatian guests, it's fortunate that there is a wide range of prices in the family accommodation segment.

Last year, for example, a family of four in Dalmatia could choose an apartment for an average of 70 to 250 euros per day. This summer could be different, but in any case, guests will need from a few euros per day to a few tens of euros more than they did last year. As a rule, hotels are a more expensive option, but they contracted with partners last year on prices for 2022, which are higher by the amount of inflation expected at the time of two to three percent.

Some capacities have already been sold off at their previously published prices. As for the "unsold" beds, all large hotel companies are using so-called revenue management software that changes prices on a daily basis depending on supply and demand, ie the availability of capacity in its own sales,'' explained the director of the Croatian Tourism Association, Veljko Ostojic.

''When it comes to the price of food and beverages in Croatian restaurants and facilities that provide à la carte services, there will definitely be an increase depending on the movement of prices of input materials; groceries, drinks, energy etc. At this moment in time, it's too early to say how much those increases will be, more will be known in the second half of March,'' added Ostojic.

In the hospitality industry, everything is more or less clear. We will pay more for coffee, juices, beer in cafes, and of course, most Croatian restaurants will get new price lists, writes Vecernji list.

According to Nikola Eterovic, president of the National Association of Caterers, each restaurant has its own specific situation, but he also believes that, for example, the coffee we now pay ten kuna for will increase ten to 30 percent, so by one to three kuna, and there is a simple explanation for the fact that some Croatian restaurants are announcing that they will not raise their prices.

''Either they've already done so in the past few months, so now it is a marketing ploy with them saying they aren't going to do it, or they're working against the tide of the economy at the moment. There is no third option there,'' said Eterovic, adding that lower VAT, which is a now very old request of Croatian restaurants and other hospitality and catering facilities, would be of great help to the industry.

For more, check out our business section.

February the 6th, 2022 - Just how does the Croatian Government plan to shield the average resident of this country from the ever-increasing prices for gas and electricity? There does appear to be somewhat of a plan in place.

As Poslovni Dnevnik writes, due to the current wave of exponentially rising prices, especially for energy, some EU member states have already adopted a package of measures to mitigate the price shock for residents. There is a lot of talk here in Croatia about inflation and prices, but the Croatian Government hasn't yet revealed the details of the aforementioned package of similar shielding measures.

However, it seems that it will be adopted earlier than it has been communicated so far, more specifically at some point during this month. At the same time, a solution to the gas crisis hasn't yet been found in Zagreb. Company owners are scratching their heads and don't know what to do with the huge bills they're getting, gas companies don't know what to do with their losses, and the city and the state are continually communicating in opposition as to who will pay the minuses and to what extent.

Prices in many shops have already risen several times and will continue to grow as this situation unfolds, but what's worrying many is the reports of a ''tsunami of price hikes'' which is set to arrive in April, when gas and electricity prices will rise even more. Everyone is waiting for the Croatian Government's package of measures with which, according to employers and the opposition, the powers that be are already running very late, as reported by N1.

"As for the thesis that it's late, no it isn't too late. There's nothing to be late for. We're working on a package of measures. This package of measures will affect all stakeholders in the system, in part companies. The idea is not to wait too long with this package, for it to be presented to the public and those interested during the month of February, in the coming weeks,'' said the Minister of Economy and Sustainable Development, Tomislav Coric.

Gas vouchers?

The poorest residents of this country who have already received electricity vouchers can now count on getting their hands on gas vouchers as well. It isn't yet known how many of them will have this particular possibility expanded to them and how many vouchers will be issued. As prices for both electricity and gas are sure to rise dramatically, the conclusion is clear:

"Two hundred kuna cannot be enough, but it's difficult to say at this moment in time how much the amount will have to go up. We ourselves tried to calculate whether it needs to be 300, 350, 400 or some other amount,'' said Kresimir Sever from the Independent Croatian Trade Unions.

A gas crisis in Zagreb

Meanwhile, a real gas crisis is happening here in the capital. When it comes to the city's gasworks, the supply is in such losses that bankruptcy is now a real threat, and the help of the state should not be counted on either.

"One should not expect from the Croatian Government, where the city government is in Zagreb, to cover the debt of the city gas supply in Zagreb," said Minister Coric.

However, Zagreb Mayor Tomislav Tomasevic claims that talks between the City and the Croatian Government are taking place. He admitted that part of the responsibility lies with the former administration headed by the late Milan Bandic, but there is also an objective circumstance - gas prices that are raging absolutely everywhere.

"There are also talks in various European Union countries between suppliers owned by local governments and the state, to absorb these blows, especially in the business sector, and also to enable the normal operation of these companies because there are many alternatives, all of which are bad for everyone,'' Tomasevic pointed out.

For more, check out our politics section.

ZAGREB, 21 Jan 2022 - The Bridge and Social Democrats groups in the Croatian Parliament on Friday used the discussion on the new law on consumer protection to criticize the government for its poor handling of "galloping inflation."

"Everyone is protecting their citizens except the Croatian government, which says it might do something (about the inflation)," Social Democrat Davor Bernardić said, calling on MPs to support their proposal to freeze the prices of staples.

"In the last 10 months, every other food product has gone up in price. Prices of some products have increased by 150 percent, and the price of toilet paper has gone up by as much as 50 percent," he added.

Bridge's Nikola Grmoja wondered if the government was thinking of protecting consumers from its unreasonable decisions, such as a freeze on fuel prices. He instead called for the abolition of excise taxes on fuel, because otherwise "the cost will again be borne by consumers."

Lawmakers from the ruling Croatian Democratic Union (HDZ) said the new law on consumer protection was a "serious step forward." They welcomed the fact that the dual quality of goods, namely the marketing in Croatia of goods purporting to be of the same quality as those placed on the market in other EU member states even though they differ in composition and quality, would be treated as an unfair trading practice.

Barbara Antolić from the Social Democratic Party (SDP) welcomed the new law but noted that it lacked qualified people to monitor its implementation because inspectors were not trained well enough for online sales.

For more, check out our dedicated politics section.

ZAGREB, 17 Jan 2022 - Prices of consumer goods and services in Croatia, as measured by the consumer price index, increased by 5.5% in December 2021 compared with December 2020, while in the whole of 2021 they rose by 2.6% year on year, the State Bureau of Statistics (DZS) said on Monday.

The annual inflation rate in December was the highest since October 2008, when it was 5.9%.

Compared with November 2021, consumer prices on average stayed the same.

The highest year-on-year price increase was observed in transport, of 11.4%, which was largely generated by fuel price increases, of 22.5% on an annual level.

All other categories also recorded annual price increases, except the health sector which registered a decrease of 0.3%.

Food prices, which account for a significant portion of the goods basket, continued their rise that began in July, increasing by an average of 8.1% in December.

Prices of alcoholic drinks and tobacco increased by 5.9%, clothing and footwear by 3.7%, housing by 3.2%, and household furniture by 4%.

Compared with November, the highest increase in prices was registered for food and non-alcoholic beverages (+1.4%). Prices of clothing and footwear decreased by 8.2% and those of housing, water, electricity, gas, and other fuels by 0.2%.

The average annual inflation rate for the entire year was 2.6%.

For more, check out our dedicated politics section.

ZAGREB, 17 Dec 2021 - Prices of consumer goods and services in Croatia, as measured by the consumer price index, increased by 4.8% in November 2021 compared with November 2020, their highest rise since February 2013, the National Bureau of Statistics (DZS) said on Friday.

Compared with October 2021, consumer prices rose by 0.7%.

The highest year-on-year price increase was observed in transport, of 12.9%. It was largely generated by fuel price increases, of 26.6% on an annual level, reflecting increases in global prices of crude oil.

All other categories also recorded annual price increases. Prices of food rose by 6.0% and those of alcoholic drinks and tobacco by 5.6%.

Compared with October, prices of food and non-alcoholic beverages increased by 1.5% and of clothing and footwear by 1.3%, while prices of recreation and culture fell by 0.02%.

In the year to November 2021, the average annual inflation rate reached 2.3%.

For more on business, follow TCN's dedicated page.

ZAGREB, 14 Dec 2021 - In the past few months inflation perception has grown strongly and the perceived inflation rate now exceeds 24%, which is much higher than the realized consumer inflation rate of 3.8% in October, the central bank (HNB) has said.

Based on data from a survey on consumer confidence, Lucija Fioretti, Karlo Kotarac, and Davor Kunac of the Croatian National Bank's (HNB) research department have analyzed changes in inflation perceptions in Croatia as well as the reasons for the recent divergence between inflation perceptions and the realized consumer inflation rate.

Since an unusually great divergence between inflation perceptions and the realized inflation rate may signal problems regarding the credibility of and confidence in official price statistics, the authors of the analysis have also compared the retail prices of a number of products published by the Croatian Bureau of Statistics (DZS) with microdata on retail prices in the main retail chains in the country.

The HNB says that the analysis indicates a high level of conformity between individual components of consumer inflation as calculated by the DZS and microdata on the prices of individual products available to the HNB.

The analysis notes that inflation perception, that is, the subjective consumer assessment of price growth is exceptionally important to monetary policymakers because it is closely related to the formation of expectations regarding future inflation, which, ultimately, are an important determinant of the future realized inflation.

In the past few months, inflation perception has grown strongly and now exceeds 24%, which is much higher than the realized inflation rate, which stood at 3.8% in October, the HNB analysts say.

They note that the average perceived inflation has been growing unusually fast in relation to the realized inflation and that one should look at the movement of prices of certain products as the reason for the increased inflation perception.

They note that there is a strong asymmetry in the recent increase in consumer prices, with the prices of some crucial food products such as cooking oil, milk and dairy products, bread, potato and petrol having gone up unusually strongly. All of those products belong in the categories that affect perceived inflation the most.

The analysts stress, however, that despite the strong rise in the prices of some basic consumer basket products, the price increase is not widespread for the time being.

For more, check out our dedicated politics section.

October the 11th, 2021 - CNB Governor Boris Vujcic has stated that the Croatian inflation rate could be higher, adding that while forecasts of domestic economic growth are positive, there are many negative risk projections to take into proper consideration, too.

As Poslovni Dnevnik writes, CNB Governor Boris Vujcic spoke in Croatian Parliament on Thursday and explained that, unlike the forecasts for Croatian economic growth, which are generally very good, the projections of inflation are dominated by negative risks, ie those that could lead to higher inflation rates.

In Parliament, where he presented the Croatian National Bank's semi-annual piece of information on the nation's overall financial situation, price stability and the implementation of monetary policy in the second half of last year, Vujcic reminded those present of the CNB's projections for economic growth of 8.5 percent this year, and of 4.1 percent in 2022, which, he estimated, will have a positive impact on both the situation with employment and the situation with average wages.

"Due to the sheer amount of uncertainties which still remain in place, it's possible that these projections will not end up actuallybeing realised, but unlike the previous ones, the positive and negative risks are balanced," said Vujcic. He explained that the negative risks to the domestic economy relate to the possibility that the epidemiological situation in the Eurozone will worsen in the fourth quarter and that any remaining restrictive measures will be tightened once again, which would result in weaker foreign demand and as such, negatively affect Croatian exports.

When it comes to the situation with inflation, it will accelerate to 2.3 percent this year, and slow slightly to 2.1 percent in 2022. In the previous part of the year, the acceleration of inflation occurred mainly under the influence of rising energy and food prices, said CNB Governor Boris Vujcic, emphasising the fact that the current projections of inflation are dominated by negative risks, ie those that could lead to higher rates eventually.

For more on Croatian monetary policy, follow our politics section.

October 9, 2021 - When it comes to the inflation rate in Croatia, it will accelerate to 2.3 percent this year, and slow slightly to 2.1 percent in 2022, according to the Governor of the Croatian National Bank (CNB), Boris Vujčić.

The Governor of the Croatian National Bank (CNB), Boris Vujčić, said in the Croatian Parliament on Thursday that, unlike the forecasts of economic growth, the projections of inflation are dominated by negative risks, such as those that could lead to higher rates, reports Poslovni Dnevnik. In Parliament, where he presented the CNB's semi-annual information on the financial situation, price stability, and implementation of monetary policy in the second half of last year, Vujčić reminded of the CNB's projections for economic growth of 8.5 percent this year, and 1 percent in 2022, which he estimated, will have a positive impact on employment and wages.

"Due to the still great uncertainties, it is possible that these projections will not be realized, but unlike the previous ones, the positive and negative risks are balanced," said Vujčić. He explained that the negative risks to the economy relate to the possibility that the epidemiological situation in the euro area will worsen in the fourth quarter and the restrictive measures will be tightened, which would result in weaker foreign demand and negatively affect Croatian exports.

When it comes to inflation, it will accelerate to 2.3 percent this year, and slow slightly to 2.1 percent in 2022. In the previous part of the year, the acceleration of inflation occurred mainly under the influence of rising energy and food prices, said Vujčić, emphasizing that the projections of inflation are dominated by negative risks, ie those that could lead to higher rates.

Previously, in mid-September, Vujčić himself commented on the expectations about the inflation rate in Croatia regarding the next insertion of the euro as the official currency in the country, commenting about the situation in the United States, that ''it has a higher inflation rate, but the economy is overheated there, they also have strong fiscal stimuli that are stronger than European ones and I do not see that at this time such an inflation rate could happen in Croatia, we expect that year-round inflation rate to be 2.2 percent. This is, in principle, the goal of the European Central Bank, so we should not be concerned about that. The problem is if there is a change in expectations, wage growth, but we do not see that at the moment''.

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