June the 9th, 2022 - Inflation is continuing to cause issues across the board, and it has emerged that Croatian retail prices are higher than those in neighbouring Hungary and Slovenia. Why?

As Poslovni Dnevnik writes, in one year, a kilogram of wheat has risen in price by 80 percent, a kilogram of corn by 61 percent, flour by 55 percent, oil by 50 percent, milk by 20 percent and beef purchased from butchers by 20 percent, HRT reports. The rise in Croatian retail prices was the recent topic of HTV's Otvoreno/Open show, in which Agriculture Minister Marija Vuckovic announced new measures for farmers, including an aid programme worth about 30 million euros.

When asked about possible new state intervention due to rising food prices, Vuckovic reminded that the last big package of Government measures to help both people and companies came into force on April the 1st this year and was worth 4.8 billion kuna.

"Of course we're going to continue to try to react as we have shown in recent years," she assured, before announcing some new measures for farmers. Among other things, she announced a measure that will be intended primarily for cattle breeders, and mainly for the purpose of further protecting the breeding herds.

"I'll also announce emergency aid to farmers affected by natural disasters," she added, saying that ''after all this, there will be an additional assistance programme that will be inteded for different sectors, and refers to micro, small and medium-sized entities in agriculture and processing, and which will be worth approximately 30 million euros.''

She also said that the aid would exceed 300 million kuna.

Zvonimir Sirjan, president of the Baby Beef Association, said that Croatian cattle breeders are getting closer to stopping their production because the prices they achieve on the market are significantly lower than the price of the production process itself. "They just can't cover all the costs," Sirjan added.

He warned that the price of corn could go up to 3 kuna this autumn, and the advisor for the food industry, Zvjezdana Blazic, said that corn was already close to that price and that it was increasing all the time. However, she added, the global food index did fall slightly, which included corn, which fell 3.5 percent globally in May when compared to April.

Blazic also said that the war in Ukraine caused the biggest blow to the growth of primarily oilseeds, and then cereals.

Vjekoslav Budanec, president of the Association of Croatian Vegetable Growers, said that limiting the growth of raw material prices would help them.

Ivica Katavic, president of the Trade Association of the Croatian Chamber of Commerce (HGK), said that the whole series of price increases greatly diminished the importance of the measures, which he said were extraordinary. ''Prices are growing day by day. We have daily announcements that from the 1st of next month there will be an increase in prices and we simply don't see the end to any of this anymore,'' he said.

He said traders have tremendous competition on their hands and that no one can afford to play with high prices and margins.

"We don't need the control of the State Inspectorate, we have our customers who are our judges and executioners, who will decide on whether what's being sold is good or worth it or not," said Katavic.

Why do both neighbouring Slovenia and Hungary have lower prices in stores when compared to Croatian retail prices? Katavic said it was a very good question.

"People who would be Croatian customers go across the border every day to do their shopping because they also know that they may be able to buy something cheaper than they'd be able to get it here," he added. Blazic said that in this situation, which has affected the whole of Europe, the Republic of Croatia had only an average increase in food prices, unlike, say, Hungary, where food prices rose significantly more.

"In all countries that are closer to Ukraine, prices have risen dramatically more than in Croatia, which has had an average increase in prices," she added. Blazic said that Croatian producers are much less technically equipped - this country's productivity, she says, is around 30 percent of the European Union average.

"When we talk about the countries from which we import the most food, that's then many times more. Germany is six times more productive in terms of agriculture than our domestic producers and our product thus becomes more expensive and therefore more uncompetitive,'' explained Blazic.

Sirjan disagreed.

"Croatian retail prices are the same or significantly lower than in those markets,'' he said. Instead, he warned that the valuable resource of agricultural land, especially state-owned land, has become absolutely inaccessible to increasingly serious agricultural producers who could produce much more and better if they had it. Vuckovic said they had adopted amendments to the Law on Agricultural Land that seek to meet Croatia's strategic needs.

"No sector, no criterion can and should be given absolute priority. It's not good for competition, that's what we changed,'' she said. As for new investments and technologies, Vuckovic said that it was true that Croatia was at a mere one third of the EU's average productivity, but also that the country had grown faster in terms of productivity in recent years than many other member states had.

Budanec said that the question is who can invest in new technology at these prices today.

“If we barely survive to stay in production at all, how are we going to invest in new technologies, robotics and the rest? And we know that labour has become extremely expensive. Vegetables are labour-intensive," he said. Should we be afraid that at these Croatian retail prices, some groceries will simply not be able to be found on the country's shelves at all?

Katavic said that he was absolutely convinced that there would be no shortage of food in Croatia.

"Our input channels are solid, I think we've shown that in the time of the coronavirus pandemic and it will continue to be so," he said.

Blazic said that the Croatian structure of agriculture at the moment is really in favour of having those products that could be in short supply in Europe and on the global market, and those are cereals and oilseeds. "And in that sense, we should never be left without these products if we manage them wisely," she said. She added that shortages sometimes occur in Europe, even in highly developed countries such as Germany, and she thinks that Croatia should start thinking about saving food and not throwing it away.

Katavic also said that it was certain that Croatian retail prices would continue to rise for some time, but expressed hope that after the situation calms down and prices stabilise, they would return at least approximately to the level they were before the war in Ukraine broke out. Blazic, on the other hand, said that it will likely be very difficult for food prices to return to the levels they were being sold at just a few years ago.

"Up until two years ago, food was actually quite cheap. We shouldn't even be talking about the return of cheap food anymore,'' she warned. Sirjan said that he was optimistic and that he thought that Croatian retail prices wouldn't increase significantly. He called on domestic consumers to buy products from Croatian farms of proven quality.

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February the 19th, 2022 - With rising energy costs, with a particular emphasis being placed on fuel and gas continuing to pose issues to both business owners and average citizens alike, just how will government inflation measures really affect the average Croatian household budget?

As Poslovni Dnevnik writes, after the government presented its inflation measures to attempt to mitigate the impact on people's standards, the country's residents, especially those who use natural gas for their heating, have begun to calculate precisely how much each of these measures will have an impact on the average Croatian household budget.

It should be noted that the government has decided to lower the VAT on gas from 25 down to just five percent, and that will be the case from April the 1st this year to March the 31st next year. After that period, gas and heat will remain permanently at the VAT rate of 13 percent, meaning that they will both be equated with the costs of electricity. In addition, the government will subsidise the price of gas to all households, with direct support of 10 lipa per kilowatt-hour, or about 20 percent of the projected price of 66 euros per megawatt-hour. The measure related to this subsidy will cost 600 million kuna.

Guided by this data, Glas Slavonije/The Voice of Slavonia writes that when it comes to gas, it would have been as much as 76 percent more expensive as of April the 1st, but with these recently revealed government measures, this increase will amount to a maximum of 20 percent, depending on stock market prices.

The average family in Croatia now pays 4,950 kuna a year for gas. Without any government intervention, this annual cost would increase by a worrying 3,762 kuna, meaning that the average Croatian household budget would need to allocate a much higher 8,712 kuna or 726 kuna per month for gas. Only by lowering the VAT rate from 25 percent down to five percent would bills grow by 48 percent, or by 2,376 kuna, and with a direct subsidy to households, the increase would be up to 20 percent. This means that as of April the 1st, the average Croatian household budget will have to allocate up to 990 kuna more for gas, or 82.50 kuna more per month.

For more, check out our dedicated lifestyle 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.

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ZAGREB, 19 July 2021 - Croatians who use natural gas for heating will be paying 25 percent more for their gas bills by 2026 at the latest, by which time a fee for greenhouse gas emissions would also be put in place, Jutarnji List newspaper said on Monday.

This scenario is included in the recently published European Commission's energy strategy Fit for 55, which aims to phase out the use of fossil fuels in transport and industry, as well as in the building sector which is one of the biggest CO2 emitters and polluters, the newspaper said.

The European Union plans to do away with gas heating by 2050 and the Commission's proposal is going in that direction and is expected to enter into force in 2026, Professor Neven Duić of the University of Zagreb Faculty of Mechanical Engineering and Naval Architecture was quoted as saying.

"Big consumers, such as electricity producers, are already required to buy CO2 emission rights. This means that small consumers who use electricity for heating are already paying the CO2 emission fee and are being discriminated against compared to consumers who are not paying this fee because they use natural gas," Duić said.

The Commission's calculation about the need to increase natural gas prices by 25 percent for Croatian consumers who use natural gas for heating is included in the proposal to amend the rules on emissions trading. The proposal is part of the Fit for 55 strategies, according to which Croatians currently pay 5 cents per kilowatt-hour for gas heating and will be paying nearly 9 cents once the CO2 emissions fee is in place, Jutarnji List said. 

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ZAGREB, 24 June 2021 - The standard of living in Croatia in the pandemic year 2020 was a third lower than the European Union average, despite the fact that consumer price levels were a third lower, according to data from the EU statistical office Eurostat.

Eurostat measures the standard of living by actual individual consumption per capita, which shows how many goods and services individuals consumed, regardless of whether they paid for them by themselves or the costs were borne by their governments or non-governmental organizations. Actual individual consumption per capita is expressed in purchasing power standards, which enables the elimination of the differences in price levels between countries.

Last year, the highest standard, as expressed by actual individual consumption per capita, was registered in Luxembourg and was 31% higher than the EU average.

Italy, Cyprus, and Lithuania closest to average

Luxembourg was followed by Germany and Denmark, where the standard was 23% and 21% higher than the average respectively. Cyprus, Italy, and Lithuania were closest to the average, where actual individual consumption per capita was up to 4% lower than the EU average.

Spain, the Czech Republic, Portugal, Malta, Poland, and Slovenia registered actual individual consumption per capita of between 10% and 20% below the EU average.

Croatia alongside Bulgaria

In Romania, Estonia, Greece, Slovakia, Latvia, and Hungary, actual individual consumption was between 20% and 30% lower than the EU average, while Croatia and Bulgaria had the lowest standards. Actual individual consumption per capita in Croatia in 2020 was 33% below the EU average, compared with 34% in 2019, while Bulgaria was 39% below the EU average.

Highest consumer prices in Luxembourg

Eurostat also showed differences in consumer prices between EU member states, using purchasing power standards.

Luxembourg had the highest price level index for actual individual consumption in 2020, half as high as the EU average. It was followed by Denmark, Sweden; Ireland, and Finland with price levels more than 20% higher than the average.

Consumer prices in Belgium, France, Germany, and Italy were slightly above the EU average, while those in Spain and Cyprus were up to 10% lower. Price levels in Latvia and the Czech Republic were about 30% below the average.

Croatia placed alongside Latvia, with price levels 35% lower than the EU average.

Prices in Hungary, Poland, and Bulgaria were between 40% and 50% below the EU average. 

GDP per capita

Luxembourg remained in the top spot as the country with the highest GDP per capita in the European Union. Expressed in purchasing power standards, it was two and a half times higher than the EU average.

Luxembourg was followed by Ireland, with GDP per capita slightly more than twice as high as the EU average, and Denmark, the Netherlands, Austria, Sweden, and Germany with GDPs roughly a fifth higher than the average.

France's GDP per capita was slightly above the average and Malta's slightly below, while Italy and the Czech Republic had a GDP per capita of less than 10% below the average.

The countries with GDPs per capita of between 10% and 20% below the EU average included Slovenia, Lithuania, Cyprus, Estonia, and Spain. Portugal, Poland, Hungary, Latvia, Slovakia, and Romania had GDPs per capita of between 20% and 30% lower than the average.

Croatia placed alongside Greece, with a GDP per capita of 36% below the EU average, up from 35% in 2019. Bulgaria was at the bottom of the ranking with a GDP per capita of 45% below the EU average.

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May the 2nd, 2021 - Living costs in Croatia are often generally lower than they are in Western Europe, allowing those coming from the likes of Germany, France and the United Kingdom to have even deeper pockets when living in Croatia, especially if they receive a foreign wage or pension. A look at costs shows that living costs in Dubrovnik and Zagreb rival those in European cities like Brussels and the Hungarian capital of Budapest.

As Marina Klepo/Novac writes, although mayoral or county candidates rarely talk about the cost of living in the constituencies in which they're running in elections, they would certainly have a good reason to do so. On the list of the cost of living in 608 cities across the world as looked into by the popular Numbeo portal, the global database of consumer prices (groceries, clothing and footwear, taxis, utilities, internet, transportation, restaurant offers, allocations for sports activities, for kindergarten, schooling), takes five Croatian cities into account. The most expensive are the living costs in Dubrovnik, which is unsurprising and which took a very high 65th place, the second is Zadar, in 275th place, followed by Split (312), Rijeka (322), Zagreb (346) with  the cheapest being the Eastern Croatian city of Osijek, which took 374th place on the list.

When it comes to countries, on the list of all 138 of them, Croatia is takes 42nd place, and of the countries of Central and Eastern Europe, only Estonia (41st place) and Slovenia (38th place) are slightly more expensive, while life is in the rest of the countries in that general area is much cheaper. One reason for this, it seems, is the high cost of basic utilities, which include electricity, heating, water and other such costs for housing. Among 107 countries, Croatia ranks fairly high on that list, coming in at 17th place.

The monthly living costs in Dubrovnik for a family of four, as calculated by Numbeo, amount to as much as 23,888 kuna, without the cost of rent taken into account. When compared to the capital city of Zagreb Dubrovnik is 54.2 percent more expensive, while the rental price is 31.7 percent higher. On the other hand, a family of four in Osijek, without rent, needs 12,980 kuna per month, an enormous drop in comparison to Croatia's southernmost city. However, it is more expensive to live in all five Croatian cities than, for example, in Warsaw or Budapest.

The cost of living is just one of a number of criteria by which the quality of life in cities is assessed. When it comes to national capitals, last year's survey by a German company specialising in relocation, Movinga from Berlin, showed that among 150 cities, Zagreb ranks only 135th, and only the capitals of Lithuania, Latvia and Bulgaria are ranked worse. Cities are rated according to 16 criteria.

Thus, in the category of mobility, which shows the efficiency of private and public transport (the length and regularity of the system, the share of passengers in the total population, and the degree of traffic congestion), Zagreb is significantly worse than comparable cities from other countries in Central and Eastern Europe.

For more, follow our lifestyle page. Check out Living in Croatia for all you need to know.

Croatia has many societal issues, but generally speaking, most living costs are satisfactory for most, this is especially true if you have moved to Croatia from a richer, Western European country with an undoubtedly higher GDP and a better economic situation - Or is it?

While wages in the Western part of our continent, in countries such as the United Kingdom and Germany, often sound very high and extremely appealing when compared to the typical take home Croatian salary, one tends to forget that the living costs in those countries are also difficult to compare.

Gas and electricity in the UK, for example, can be extortionate, especially when you need your heating on and lights blazing for a good few months of the year due to the cold and darkness, a problem not encountered as much in Croatia.

That being said, you'd expect salaries and living costs to correlate to a more acceptable degree regardless of where you are in the world. Bread, being the metaphorical object of all things that refer to wealth, is one of them.

As SibenikIN writes on the 14th of September, 2019, in Croatia, consumer prices for bread and cereals were about three percent higher than the EU average in 2018, and higher than in some wealthier EU countries such as Germany, the Netherlands and the United Kingdom. This has been confirmed by the data released this week by the Eurostat.

According to the data, bread and cereals were by far the most expensive in Denmark (with an index of 151 and an EU average of 100), followed by Austria with 35 percent higher prices than the EU average and Finland and Luxembourg with 27 percent higher prices than average, RTL reports.

Cyprus, Sweden, Ireland, Italy, Belgium and Greece are also among the ten most expensive EU countries in terms of the above.

With an index of 102.9, Croatia is in the middle of the rankings and is around the EU average, and when it comes to our neighbour to the north, Slovenia, bread is a little more expensive and a little cheaper over in Germany.

The cheapest bread and cereals being sold in the EU in 2018 were in Romania, Poland, Hungary, the Czech Republic and in Bulgaria.

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As Novac writes on the 6th of August, 2019, yet another tourist season is in full swing, and while some of Croatia's private renters are struggling with filling their empty beds, certain tourists continue to resent the high prices of some rather basic services.

Consequently, Glas Slavonije researched and compared the prices of fruits and vegetables available on five markets along the Adriatic coast with the prices pointed out by producers and sellers at the main market in Osijek, far from the sea in Eastern Croatia. The differences are enormous, with prices for the same product in certain places up to 100 percent more expensive.

On Istrian markets, the prices of a dozen ingredients on the markets of Pula and Poreč were compared with those in Osijek. In Pula, you'll need to allocate 12 kuna for a kilogram of nectarines, and you will pay the half the price, 6 kuna, for the exact same amount in Osijek. For tomatoes, the difference is even greater, in Pula, one kilogram costs 22 kuna, while in Osijek, the same amount costs 10 kuna and similar to the cost of pears, which in this coastal town cost 20 kuna, compared to 8 kuna in Slavonia.

You won't manage to save anything on the markets of Poreč, either, where a pound of carrots costs 15 kuna, and in Osijek you will pay between 8 and 10 kuna for the same amount, it's the same situation with peppers, for which it is necessary to allocate 20 kuna in Poreč and 12 kuna in Osijek.

You can find your favorite summer fruit, watermelon, on Poreč market for six to eight kuna per kilo, while in Osijek, you'll spend half as much or find it for even less, since you will only need to spend about 3 kuna for the same amount.

Interestingly, the price of zucchini is the same in both of these cities in Croatia and amounts to 10 kuna, but the price of young potatoes is twice as expensive in Poreč and costs between 8 and 10 kuna per kilo, while in Osijek it costs 4 or 5 kuna, depending of course on the producer. There is a drastic difference in the price of plums, which are offered on Poreč market for 16 kuna per kilogram, while in Osijek, you can easily find the exact same amount for 3 or at most 5 kuna.

In Dubrovnik, one producer complained that they were the most expensive "market" in the whole of Croatia. It is difficult not to become irritated by the general cost of basic things in the city under the famous Mt. Srđ, where you will need to fork out as much a 25 kuna per kilo for pears, 40 kuna for grapes (both white and black), onions, peppers, tomatoes, lettuce, and even plums cost 20 kuna, and for garlic and legumes, you'll likely spend about 40 kuna per kilo. A truly incomprehensible price difference.

You can find a slightly more acceptable set of prices on Split's market, where a kilogram of tomatoes or peppers costs up to 15 kuna per kilogram, the price of carrots is equal to that of those sold on Osijek's market, ie, from 8 kuna to 10 kuna, and when it comes to nectarines, the price ranges from 8 to as much as 16 kuna per kilogram.

You'll pay almost double for pears and nectarines in Zadar than you will on Osijek's market, where both fruits cost 15 kuna per kilo, it's the same situation with plums at a price of 10 kuna, while the ''twice the price'' trend is rounded off with watermelons with a price of 6 kuna, versus Osijek's 3 kuna per kilogram.

However, you will be better off in Zadar if you're buying zucchini and tomatoes, which you can find for 5 or 6 kuna per kilo. The coastal price is also similar for pears, which in most coastal cities cost 15 kuna a kilo, and another summer favourite, apricots, are also twice as expensive in Zadar than they are in Osijek - costing 20 kuna per kilo. There is a big difference in Zadar's offer of corn, which costs 4 kuna a piece, and the one on the Osijek market, costing only 2 kuna.

Since January the 1st, 2019, VAT on fruit, vegetables, meat and fish in Croatia has been reduced, but data from the Central Bureau of Statistics in the months that followed showed that this did not generally affect the prices of these products for the end buyer, and some prices even went up. 

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