Croatians must pay with euros from tomorrow: ‘Almost everything will be more expensive’

“Now we can still pay with both the kuna and the euro and then you can clearly see that most products have become more expensive,” says 28-year-old Petra. She often went to neighboring Slovenia to buy cheaper groceries there, but now it’s even worse, she says.

“The prices of some commodities, such as oil and sugar, are fixed by the government, so it’s not too bad in that respect. But everything else…”

It rains complaints at the inspection. In Croatian media says the government that they have investigated prices of about 600 products or services and that in 30 percent of the cases there is an unjustified price increase compared to the prices on December 31 last year.

Usually it is a rounding up, for example at the bakery. But in extreme cases, such as at the hairdresser, the increases can go up to 50 percent. The government has announced that heavy fines will be handed out to companies and traders if they make the products or services much more expensive.

Painful

“We were already dealing with very high inflation anyway,” says Jan de Jong, a Dutch entrepreneur who has been living in Croatia for 16 years. “Now some things are even more expensive. That is painful, but it is not just because of the euro.”

De Jong also notices that he easily rounds off prices himself. “A cup first cost 10 kuna, now I saw that it has become 1.33 euros somewhere. That is a strange amount and then you quickly turn it into 1.50 euros.”

Inflation

Croatia’s GDP, or economic growth, was still 6 percent last year. It is expected that in 2023 it will be just 1 percent, partly due to the high inflation.

Last year the European Commission polled how Croatians view the introduction of the euro. This showed that more than half are positive, but that there are also many concerns. No less than 81 percent of the respondents feared in advance that prices would rise. This concern is therefore partly justified.

For Petra it is even a reason to make concrete plans for emigration to Germany together with her boyfriend. “Not just because of the euro, of course, but more because of the overall situation. We just don’t earn enough to pay our rent and start having children.” She also believes that not enough is being done about corruption.

Purchasing power

Petra’s boyfriend works as a postman and earns 500 euros a month. She herself works in education and has a salary of 830 euros. The average in the country is 1150 euros. “Wages are higher in the capital and also on the coast, because of tourism. But where we live, there are fewer opportunities.”

Although Croatia is certainly still a lot cheaper than the Netherlands, the prices of groceries, rent and other goods are so high that purchasing power well below the European average lies. Life in Croatia is relatively speaking almost twice as expensive as in the Netherlands.

De Jong is somewhat more positive about the introduction of the euro. “People are already quite used to it. Larger purchases, for example real estate and cars, the prices of which have always been communicated in euros.”

De Jong also thinks that the euro can be an incentive to invest in Croatia. “In the past there was still the risk that the Kuna would devalue. That risk has now disappeared.” It is also now becoming more favorable to take out loans, which could boost the economy.

Tourism

Croatia’s economy is largely dependent on tourism, accounting for as much as 24 percent of GDP. The fact that you no longer have to change your money is a plus for many people. This country, with its endless coastline, used to be known as a cheap destination. “But that is really in the past,” says De Jong.

Apart from the introduction of the euro, Croatia has also become a member of Schengen. That means there will be no more border controls. “I think that tourists who wanted to go to Croatia were not stopped by border crossings,” says De Jong. “But we have also stood still for five hours. That will no longer happen, but the experience for tourists is of course better.”

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Recent News

Editor's Pick