by croatiaweek
September 2, 2025
in
Governor of the Croatian National Bank (HNB), Boris Vujčić, has addressed why inflation has returned this summer, what is driving property prices, and how credit and tourism are being affected.
Speaking in an interview for Dnevnik Nova TV, Vujčić outlined the main pressures on Croatia’s economy.
Summer inflation pressure
Vujčić noted that inflation typically rises during the summer tourist season. He explained that differences in prices between the coast and the interior, along with spending by foreign visitors, contribute to increases in the consumer price index.
“Over the past three months, inflation has picked up mainly due to food prices. All other components are in line with expectations,” he said.
Strong demand and agriculture’s weakness
According to Vujčić, inflation is being fuelled by strong domestic demand and low agricultural productivity.
“Wages have risen significantly – 6% in 2023, 12% in 2024, and this year around 6%. At the same time, employment has grown by 40–50,000 jobs. This gives sellers room to raise prices. On the other hand, our agriculture is far less productive than in the EU, which keeps food prices high,” he explained.
Property market trends
Asked about rising property prices, Vujčić pointed to increased deposits during the tourist season, many of which end up invested in real estate.
“Often people buy properties as a form of investment, but if a flat is neither rented out nor lived in, it can be seen as dead capital,” he said.
On new lending rules, he clarified that stricter conditions would affect cash loans more than mortgages. “Demand for property will not be significantly reduced,” he noted, adding that the average mortgage interest rate in Croatia is around 3%, lower than the EU average, and not expected to fall further.
Tourism season outlook
The governor said it was too early for a full assessment of this year’s tourist season.
“Nominal revenues continue to grow, but when adjusted for higher hospitality and accommodation prices, real tourist spending has been decreasing. We expect that trend to continue,” he explained.
Digital euro – no end to cash
Vujčić also commented on the upcoming introduction of the digital euro, stressing that it will not replace cash.
“There is no reason to fear cash will disappear. In fact, its role as legal tender in Europe will be strengthened. The digital euro will be a kind of digital cash, enabling secure electronic payments across the EU. Once the European Parliament approves the project, we will enter the final phase,” he said.