Wednesday, 23 November 2022

Meat Becoming Luxury Croatian Item - Here Are The Main Reasons

November the 23rd, 2022 - The price of meat has shot up across Croatia, and this Croatian item is edging closer and closer to becoming somewhat of a luxury product. Here are the main reasons why.

As Poslovni Dnevnik writes, the ongoing global crisis and bad domestic policy decisions led to a weakening of domestic production and less availability of meat products to Croatian customers. The result of this set of deeply unfavourable circumstances led to a significant increase in the price of meat, which could soon become a luxury Croatian item, reports DW.

The meat industry here in the Republic of Croatia is facing ever-increasing problems, and with it so are meat consumers, who are needing to fork out ever-higher prices to purchase meat. The cost of fattening cattle up in Croatia has doubled this year, meaning the cost of production in Croatia is at the very top of the European Union (EU). The situation is worse only in the Baltic countries of Latvia and Lithuania.

At the same time, Croatian imports of pork have more than doubled since the time before Croatia joined the EU back in July 2013. With regard to the entire production chain, the sector was also affected by the closure of the Petrokemija fertiliser factory in Kutina, according to Deutsche Welle.

The cause of this situation is not only the global crisis...

"Not only is it imported, but it's also encouraged by part of the support system in agriculture, already years ago. This endangers the development, but also the very survival of domestic animal husbandry, especially when it comes to pig and cattle breeding,'' says agricultural analyst and former producer in animal husbandry and dairying, Miroslav Kovac. He warned of the poor state of domestic cultivation, along with the establishment of the internal market and the disposal of important agricultural land.

"There's no state, no system, no people, nobody that is ready to withstand the pressure of lost values ​​like what has happened here in Croatia. The domestic population of pigs and cattle has been destroyed, in the long term, obviously, by bad political decisions, without a clear goal in space and with people, most often guided by "fireman's" logic. Dependence is increasing, and the price is increasing along with it. The biggest misfortune of all is the decimation of breeders and the obliteration of their logic of development," Kovac added.

"When will we stop sawing the branch we're sitting on?"

According to Kovac's beliefs, the public's attention shifted from the need for quick solutions here in the Republic of Croatia to the problems faced by importers. In the long run, this isn't at all good for the individual, nor for the Croatian economy as a whole: "How long will it take for us to understand the logic of the functioning of organised countries in this particular segment and stop sawing the branch we're sitting on?'' he asked.

"If we continue doing what we were doing before, the prices will rise across the entire supply chain, and even faster here, and the difference in price aside from business profits will melt away. Here, however, the current practice of emergency and partial interventions costing millions at the expense of the state and EU budgets will not help us, as it has never been the case before. I emphasise the logic of the development and preservation of the domestic economy, and now it's also in the wider context of the EU, and by no means is any of this only of individual interest,'' warned Kovac.

"Croatian agricultural policies are to blame"

Kovac has previously criticised Croatian agricultural policy due to the apparent stagnation of the sector. At the same time, neighbouring EU members Slovenia and Hungary are taking a number of quality steps forward, which have raised their production to quite an enviable level. Of course, there's also a jump in prices to take into consideration, but domestic production is in much better condition, with fewer imports and costs borne by local customers.

"Having run out of raw materials from domestic sources, problems with prices will spill over to consumers, who are the ultimate payers, including the value added tax that is charged on top of everything and isn't negligible for a long time,'' explained the analyst.

The news from the Croatian agricultural sector is somewhat dramatic: this autumn, according to Eurostat, the price of chicken in Croatia rose by 35.5 percent compared to the same period last year, while the EU average stood at 26.7 percent. It must be expressed that this refers to the placement of meat in sorted categories, while the Croatian Government capped the price of a whole chicken to just 24.99 kuna, along with products in some other meat categories.

Is Croatia condemned to imports?

Overall, the price of meat has risen significantly, seeing it become closer than ever to a luxury Croatian items. As a result, demand decreases, which in turn leads to further price increases. We can't even influence some factors, for example, the import of artificial fertilisers that came from Russia. Urea from Russia was sold in Croatia at a price three times higher than it was last year, when the Croatian market still had domestic products of this type of its own. Condemned to imported goods, Croatian farmers reduced their consumption of fertilisers, and consequently their yields. Because of this, some have already given up meat production and switched to arable farming or left the sector of agriculture altogether.

What do the manufacturers think about everything?

How the situation looks from that angle was explained by one of the largest producers in all of the Republic of Croatia - the Pivac Group. Today, too, they primarily point out that, due to market disturbances, their input production costs are constantly increasing. 

"Our production has risen in price by more than 30 percent this year alone, and due to inflation and the energy crisis, the increase in input prices will be a challenge in the future as well," the president of the group, Ivica Pivac, revealed. He emphasised that, when it comes to basic raw materials, their strategic focus on their own livestock production proved correct. However, the increase in animal feed prices by more than 80 percent influenced a significant increase in costs in this segment of production as well.

Uncertain market opportunities

"Although all of our input costs have increased, we constantly strive to minimise the impact of market disruptions on our end customers. However, unfortunately it wasn't possible to avoid price corrections. Otherwise, we'd be calling the sustainability of our production and supply into question," said Pivac.

Compared to last year's prices in Pivac stores, the current price of certain cuts of pork has increased by 18 percent, and when it comes to their most popular product, prosciutto, its price has increased by 20 percent. "Uncertain market conditions make it difficult to project price movements, however, we're going to continue to do everything we can so that the increase in input costs affects our customers as little as possible,'' assured Ivica Pivac, emphasising that for his company "when planning business, the focus remains on investments in self-sufficiency, production capacities and human resources,'' but it is still not known whether this will be enough to amortise the crisis stress for consumers and stop meat becoming a luxury Croatian item which is simply not affordable to some.

For more on inflation and increases in the cost of living in Croatia, keep up with our news section.

Saturday, 6 August 2022

Affordable Housing Project in Croatia to be Run by Erste Group

August 6, 2022 - Living costs keep climbing in Europe, including housing and rent, and Croatia is no exception. With the government policies favouring tourist rentals, there is a shortage of any, especially affordable housing in the cities. While the government sleeps on the issue, private investors are quick to recognise a niche. Erste Group prepares to run an affordable housing project.

As Poslovni writes, the absence of a housing policy in Croatia has led to the absurd situation that the residential real estate market in Zagreb and larger cities is oriented toward tourist rentals, pushing up square footage prices, and making real estate unavailable to the local population with average income.

The profession keeps warning in vain about the problem and social repercussions, but it seems that private capital has recognised a niche in what should have been dealt with by policies.

The Austrian Erste Group has launched a strategic affordable housing project that will build 15,000 apartments in the region, including Croatia, and rent them out at affordable prices. The local project is still in its infancy, and the detailed outlines of the model should be clearer by the end of the year.

“The idea of ​​realising affordable housing is very current in the environment of growing inflation and rising real estate prices in many European countries, including Croatia. In principle, there are positive examples in other countries, such as Austria, and such a model can be a good generator of cooperation between local administrations and banks, which contributes to ensuring a kind of social stability”, says the local Erste.

In Croatia, the bank has started preparations in this segment. "At this moment it is still too early for details, and it is to be expected that the bank will be able to share information with the public within a reasonable time, most likely towards the end of the current year", they told Poslovni. Unofficially, Poslovni has learned that the project could first come to life in Rijeka and then in the capital, but there is still a need to devise models and work out cooperation with local authorities.

In doing so, the regulatory framework that paved the way for implementation in other countries will be crucial. In Austria, with a long-standing tradition of affordable housing, about one billion euros was invested in about 6,000 apartments for rent. In the Czech Republic, the bank founded a separate company for the construction of affordable apartments, while in Slovakia, where the co-investor is the government, about 200 apartments in 2022. Similar projects in Hungary and Romania are in the preparation phase.

There are several open questions to which answers will be sought in the coming months, starting with an adequate model. For example, if it will be a public-private partnership or some alternative such as reserving building rights.

The legal framework should regulate the rental market and the mutual relations (and protection) of tenants and landlords because an unregulated market regularly tells horror stories about landlords and tenants from hell, where it turns out that the key factor in renting is luck. However, it will come down to taxes to ensure that the affordable rental price remains some 10 or 20 percent lower than the market price.

According to the income tax law, it is possible to penalise selling or renting to natural persons at prices lower than market prices (on which additional taxes and contributions are calculated), so the treatment of affordable rent should be regulated because it aims to be lower than the market price by definition.

Housing is a need

The interlocutors point out that there is no possibility of VAT deduction during construction (or acquisition) if the purpose is to lease for housing, which consequently inflates the value of the investment and rent.

With the current rental prices, which the profession points out as some of the lowest in the EU, developers are not interested in building apartments for rent due to long payback periods (20-30 years), which is why it will be difficult for the initiative of affordable housing to move from a standstill without the cooperation of the state and local units (from taxes to all other benefits).

Even though he has not yet seen the details of the model, Dubravko Ranilović from the real estate agency Kastel-Zagreb points out that Croatia has a specific problem that, for example, apartments are not available for young families who are not creditworthy. “In principle, we support all initiatives. We need social programs so that housing can be available to citizens because it is a need”, he says.

The market is flooded with apartments for rent, but tourist apartments. The number of tourism listings outnumbers long-term rentals by four times, with forecasts that the gap will still widen. Ranilović sees a partial reason for this in the preferential tax treatment, which has “created a tax oasis in the taxation of tourist rentals”, so apartments have expanded into residential areas, taking away part of the space in favor of short-term rentals, and the situation is further aggravated by subsidies.

Tax policy, which steadily pushes the country towards apartment building, is part of the puzzle of the lack of a meaningful housing policy.

The government is not abandoning the housing loan subsidy program despite criticism that it freezes prices (or even pushes them up) being available only to a small group of citizens, while all others (those with weaker creditworthiness, the elderly, or simply those who do not meet the prescribed tender conditions) have to pay a higher price.

The neglected middle layer

“The corporate segment recognised that with the current dynamics of the real estate market and the rampant prices, the middle class of society with incomes for which the price of new square meters and existing square meters of apartments are not affordable has been neglected.

This is a large segment of society, the demand is high and will remain so in the future, especially in Zagreb and university cities, and this is where Erste sees the creation of a new niche”, says Vedrana Likan of Colliers.

He detects the problem in the lack of regulation, pointing out that the domestic legal framework does not know the terms of affordable housing or, for example, housing accessible to the elderly population, and if this were regulated, the market would already recognise the opportunity.

“Affordable housing does not necessarily have to include new construction, a lot would be done if someone dealt with the existing housing stock”, believes Likan. Colliers' analysis, for example, shows that there are 7,074 apartments with an area of 410,600 square meters owned by the city of Zagreb and city companies alone, which could be used precisely for affordable and social housing.

For more, make sure to check out our dedicated business section.

Thursday, 16 June 2022

Ongoing Inflation Continuing to Significantly Alter Croatian Price Lists

June the 16th, 2022 - Ongoing inflation is continuing to force Croatian price lists to alter more and more frequently, with some very simple services now significantly more expensive than they were this time last year.

As Poslovni Dnevnik writes, the increase in prices across all fields owing to inflation has particularly affected Croatian islanders, and even on the gorgeous Central Dalmatian island of Korcula, company owners had to adjust their business to the recent price increases, writes HRT. As costs increase, it's now questionable how altering Croatian price lists will affect the upcoming height of the summer tourist season.

New Croatian price lists - new measures. The recent price increases have greatly affected all of the island of Korcula's small business owners, and they've had to adjust their business to this new and rapidly changing situation.

“Some artisans and small business owners had to increase their prices, some had to lay off workers, some were thinking about it. Everything is difficult, materials have become more expensive, fuel has become more expensive, now electricity also has, and what's worse, we don't know how it's going to go on like this and to what extent it will continue,'' pointed out Mihovil Depolo, President of the Korcula-Lastovo Association of Craftsmen.

Most craftsmen from this particular island have changed their price lists in line with rising costs, meaning that their prices, in order for their businesses to survive, are higher almost all over.

"We were forced to raise our ice cream prices, and a scoop of ice cream went from 12 kuna to 15 kuna, maybe it's symbolic as it's a mere three kuna, but it means a lot to us because looking at the example of a litre of milk I need to make the ice cream, well... I can't find that for under nine kuna,'' said Korcula pastry chef Jagoda Milina.

"We've increased our prices a little, we haven't done it by much, ten kuna, so enough cover this increase in fuel prices because fuel has risen by 50 percent when compared to last year," said the president of the Korcula Barcarioli, Stipe Separovic. However, it seems that tourists are also aware of the situation, and aren't too bothered about the altering of Croatian price lists on the island.

"It's not extremely expensive, it's kind of in our country, in big centres it's always a little more expensive, but it isn't too expensive for us. It's okay,'' said Marius from Lithuania.

“I love the grocery stores here, I think the prices are fair, just like when we eat out,” added Jessica from Florida.

"It's similar to some larger cities, except that in restaurants I'd say that the prices may be a little higher, but let's say in stores it's similar, more or less," believes Aleksandar from Serbia.

The global coronavirus pandemic is now finally behind us and a thing of the past, but with new price increases, it seems that another uncertain summer tourist season awaits small business owners and artisans on the islands.

For more, check out our business section.

Monday, 6 June 2022

Four More Significant Price Hikes Coming for Croatian Residents

June the 6th, 2022 - Croatian residents are unfortunately going to have to tighten their belts once again as a new wave of price hikes for things used almost daily is on the horizon.

As Poslovni Dnevnik writes, the fact that Croatian residents are expecting major economic and social blows to continue as we move forward has been evidenced, among other things, by all of the upcoming price increases that were announced in just one day, according to a report from Index.


The media has unfortunately announced a drastic increase in fuel prices in Croatia for next week.

Next week, a litre of diesel will increase significantly - by 83 lipa per litre - and the new price will be around 13.97 kuna. For a litre of petrol, Croatian residents will have to pay 70 lipa more, meaning that one litre of petrol will cost 14.56 kuna. In addition to that, the price of blue diesel will increase by 84 lipa, the price of a litre of blue diesel will therefore be 10.09 kuna.

Telecom services

All three leading telecom companies in Croatia, it seems, have decided to increase the price of at least some of their services. These price increases should become evident as of July the 1st, 2022, and, according to the information available so far, they're primarily related to mobile services.


Heating price hikes for the residents of Zagreb, Osijek, Sisak, Velika Gorica, Samobor and Zapresic have also been announced, as was reported by HRT.

Vehicle registration procedures

Of all the announced price increases for the country in the last 24 hours, the fourth regards the procedures surrounding vehicle registration.

Car registration could increase by about thirty kuna, due to additional insurance needing to be taken out in the case of incidents with wild animals on the country's roads. In the first tender, the Ministry of Agriculture failed to contract a single insurance policy with insurance companies that believe that the offered 40 million kuna is not enough to cover the total damages this type of road accident incurs.

For more on inflation, make sure to check out our dedicated lifestyle section.

Monday, 28 March 2022

Will Ongoing Inflation Also Force Croatian Coffee Prices to Rise?

March the 28th, 2022 - Could Croatian coffee prices in the country's countless cafes also soar as a result of the current inflation wave? With just about everything going up in price quite significantly, cafe owners could end up being forced to up Croatian coffee prices.

As Poslovni Dnevnik writes, Vedran Jakominic, president of the Association of Caterers of Kvarner and Istria, recently commented on the formation of new price lists for cafes for N1 television. He said that they have already formed new price lists, but that they don't know how long they will remain sustainable because the situation regarding inflation across the world is constantly changing.

"We seem to have been living in some sort of bad joke since 2017, when VAT doubled, then things started to calm down and then the global coronavirus pandemic came. Now we seem to finally be coming out of the pandemic and now we've got a war. The prices of all groceries and goods has risen, energy prices have exploded three or four times. But while this war is going on and terrible images continue to roll in from Ukraine, I think we'll manage to tighten our belts and survive, it's better than what's happening to the Ukrainians. But if you were to ask of me if this situation is good... well, it isn't at all,'' said Vedran Jakominic.

He pointed out that Croatian coffee prices aren't rising because of the basic product of coffee itself, but the biggest problem is energy prices and of course, you need energy to create this country's cult drink.

"In order to compensate for the increase in the price of electricity, you have to increase the price of coffee by one kuna, in order to compensate for the increase in the price of gas, you have to raise Croatian coffee prices by one to two kuna. Gas shot up for companies by 400 percent, electricity went up three times as well. For the average restaurant, this may mean that from paying around 8,000 kuna, their electricity bill soared to a massive 35,000 kuna. You can't correct that many price lists,'' explained Jakominic, adding that a basic espresso in Rijeka currently costs from 8 to 11 kuna. They aren't asking for a VAT reduction because they have, quite simply and understandably, all but lost faith in state aid.

"I just don't expect anything from the state anymore. They've shown that they have other interests. I understand that getting voters on side is more important. The state reacted well at the beginning of the coronavirus pandemic, but that help has faded over time," he concluded.

For more, check out our lifestyle section.

Sunday, 27 March 2022

Price of Basic White Croatian Bread Could Soar as Inflation Continues

March the 27th, 2022 - The price of the most basic white Croatian bread could soar to never before seen prices if inflation and the price of energy continues to go on as it has been.

As Poslovni Dnevnik writes, if the energy market fails to stabilise soon, which is why we're recording higher wheat prices these days, basic white Croatian bread could reach an unprecedented price of as much as 15 kuna per piece, as was confirmed by the director of Zitozajednica, Nada Barisic, to Jutarnji list.

Predictions are currently within the price of 15 kuna, according to Jutarnji list.

As Barisic told the aforementioned publication, the Croatian bakery industry is quite worried because the price of wheat is currently at record levels, and the situation changing so rapidly that contracts with suppliers are being signed for a maximum of one month at a time because nobody can, nor do they want want to guarantee that these prices will not change again and again.

A tonne of wheat on the French stock exchange currently costs 400 euros, in Argentina 354, and in Chicago 399 euros per tonne, which means that for a kilogram of wheat it is now necessary to set aside as much as three kuna in this country.

Furthermore, the average wholesale price of plain, white flour in 2021 stood at 2.50 kuna per kilogram, while it is currently at the level of four kuna, and the increase in wholesale prices has already spilled over to the prices of retail products and as such, nobody can guarantee that it will not grow further.

"As you can see, a kilo of flour in Croatian stores is now ten kuna, which is the best evidence of the market situation. The prices of bakery products across Croatia in general have been growing steadily since 2020, and although most analysts had previously predicted that the situation would stabilise by now, this hasn't happened and we can see the market going quite wild, as a result of rising energy and fuel prices,'' Barisic said.

Last year, 1,100,000 tonnes of wheat were harvested, of which about 400,000 tonnes of which were used for domestic needs, which shows that there is enough grain for domestic needs and for export, but possible difficulties will arise if there is too much demand globally, which can once again result in price increases.

"Everything is very uncertain and the Croatian bakery sector is in big trouble. We can be calm when it comes to the supply of wheat, but not in terms of prices. It's likely that, if there is no stabilisation, we will no longer be able to eat even the most basic white Croatian bread at current prices and that the possible price will end up being 15 kuna for a loaf of white bread,'' confirmed Barisic.

For more, check out our lifestyle section.

Monday, 7 March 2022

How Much Will Croatian Electricity Prices Rise After April 1, 2022?

March the 7th, 2022 - With Croatian inflation measures set to come into force on the first of next month, just how much will Croatian electricity prices rise after that date?

As Poslovni Dnevnik writes, Hrvatska elektroprivreda (HEP) has announced its new Croatian electricity prices, which will be in force from April the 1st, and it seems that electricity will still be more expensive for some consumers than what Prime Minister Plenkovic announced it would be back in mid-February.

Back in mid-February, the Croatian Government adopted a package of measures to try to put a cap on soaring energy prices, according to which VAT on electricity will remain at 13 percent, and Prime Minister Plenkovic announced that electricity prices for households should increase by up to 9.6 percent. Without the introduction of these government measures, the growth of prices for households across the country would stand at 23 percent, all because the price of electricity on stock exchanges has quadrupled in just one year, writes Energetika-net.

However, the published price lists from HEP suggest that the price increase for most people who have dual-tariff metres in their homes will be higher than expected, at least according to their current calculations.

"The 9.6 percent increase in Croatian electricity prices was probably used in the presentation as a represenation of a mix of different types of consumers, but it doesn't apply to all consumers in the ''household'' category. When the tariff items published by HEP Elektra (universal service) and HERA are applied, households will receive bills which are 8 percent higher from this supplier as of the 1st of April for one tariff metres, while two-tariff metres (TM white) will receive bills which are higher by 11 percent.

When it comes to the question of whether or not Croatian electricity prices for end users will actually increase even more, it all depends on HEP's decision, ie whether they will start collecting a solidarity fee, which they haven't been collecting so far. In that case, the bills for one tariff metres (blue) would grow by 11 percent, and for two-tariff metres (white), by 14 percent. As for HEP Supply (HEPI), the average growth will be 14 percent, and if the solidarity fee does indeed start being collected, then growth will rise to 17 percent. These calculations include VAT,'' explained Nenad Kurtovic from the Split Consumer Association.

When asked by Novi list about their new tariffs, HEP replied that the amount of change in the cost of electricity will all depend on the tariff model and of course on the overall consumption of each individual customer.

"As announced in the presentation of the package of inflation measures to mitigate the growth of energy prices by the Croatian Government, the average electricity bill will increase by 9.6 percent. The amount of the change in cost in each individual case will depend on the tariff model and the amount of electricity consumed, as well as on the ratio of consumption in the higher and lower tariffs,'' HEP replied.

For more, make sure to check out our lifestyle section.

Sunday, 27 February 2022

Croatian Food Prices Increase by Three Percent in Just One Month

February the 27th, 2022 - There has been a concerning three percent increase for Croatian food prices, which also regards certain drinks, in the space of just one single month. What's going to unfold as this situation continues is worrying for many.

As Novac/Jutarnji/Marina Klepo writes, back in January 2022, inflation accelerated further, to 5.7 percent when compared to the same month last year, while it was 0.3 percent on a monthly basis, according to the CBS. As such, the December (2021) record of 5.5 percent was exceeded and inflation reached its highest levels in Croatia since way back in October 2008. As was the case in previous months, the rise in prices is led by energy and food.

Pressure on Croatian food prices began back in the middle of last year due to developments on global markets, and partly due to unfavourable conditions here on the domestic market. In January, food and non-alcoholic beverages were as much as 9.4 percent more expensive than they were a year ago, and in just one month, prices jumped by 2.9 percent.

As food makes up a quarter of the average Croatian consumer basket, its impact on the overall level of inflation is also significant - amounting to 2.44 percent. Accelerated growth of energy prices continued, meaning that transport, which is primarily related to fuel, recorded double-digit annual growth of 10.8 percent, with a contribution to inflation growth of 1.59 percent.

In third place is the category of furniture and home furnishings with an annual growth of five percent and a monthly growth of 1.3 percent. Prices in Croatian restaurants and hotels, on the other hand, were 4.7 percent higher back in January and 0.4 percent higher than they were in the previous month of December.

According to the harmonised consumer price index used by Eurostat, inflation here in the Republic of Croatia back in January stood at 5.5 percent. At the same time, the average for the Eurozone was 5.1 percent, and for the European Union (EU) stood at 5.6 percent. The highest inflation rates are still being recorded in the Baltic countries: Lithuania with 12.3 and Estonia with 11 percent. The lowest price growth, on the other hand, has been seen France, 3.3 percent, and in Portugal, 3.4 percent.

In order to mitigate the impact of inflation on the cost of living, the government again administratively capped the country's fuel prices in early February, and then adopted a comprehensive package of measures worth 4.8 billion kuna, which will apply from the 1st of April. All hopes were that this rapid inflation would be temporary, that prices would slow down in the second half of the year, but Russia's invasion of Ukraine throws a spanner in the works of all previous forecasts.

"Although price growth is limited by government decisions and administrative restrictions on fuel prices, given recent events in Ukraine and the escalation of the conflict, our projections for this year are exposed primarily to rising risks," said RBA analysts, who expect an average consumer price growth rate in 2022 of 3.1 percent.

However, the Croatian National Bank (CNB/HNB) has previously warned that inflation could reach 4.5 to five percent this year. As things stand, that assessment could also undergo corrections. Initial estimates by global think tanks suggest that the key effects of the war in Eastern Europe will be higher inflation and slower economic growth.

If oil prices rise to $130 a barrel in the next few weeks and European gas prices to 180 euros per cubic metre, the contribution of energy to average headline inflation could increase, instead of falling gradually as was generally previously assumed. In addition to energy, rising Croatian food prices also seem inevitable, albeit with less of an impact on overall inflation, given that Russia and Ukraine export 25 to 30 percent of the world's wheat, and Ukraine is also a major exporter of corn.

As such, in the coming months, during the second quarter, it is estimated that in developed economies, the inflation rate could be at least a fifth higher than previously calculated and exceed six percent. However, according to Global Economics analysts, inflation should fall once again later in the year, partly due to base effects, but average inflation levels in developed economies, they estimate, could stay at around four percent by the end of the year.

For more on inflation and increasing Croatian food prices, check out our lifestyle section.

Saturday, 26 February 2022

Retiring in Croatia as a Non-EU National: A Cost-of-Living Comparison

26 February 2022 - In addition to its beautiful architecture and stunning landscape, a key draw for retirees looking to relocate to Croatia’s shores is a lower cost of living, especially for those coming from non-EU countries like the United Kingdom (UK) and America.

So far, we’ve discussed how to relocate to Croatia, and the cost of both public and private healthcare. Today, I present one of the more everyday aspects of the cost of living for retirees by examining the average prices of groceries.

I also draw comparisons across the top 3 most populated cities in Croatia, the UK, America, Canada, Australia.

  • United States: New York, LA, Austin
  • Australia: Melbourne, Sydney, Brisbane
  • Canada: Toronto, Montreal, Calgary
  • Croatia: Zagreb, Split, Rijeka
  • UK: London, Birmingham, Glasgow

According to the Croatian Bureau of Statistics (DZS), over the last 5 years, these countries represent a significant proportion of non-EU citizens that choose to live out their retirement in Croatia.

Here’s a quick overview of the results:


A couple of brief notes before we do a deeper dive into these figures.

Unlike the other 4 countries, produce you find in farmers' markets or even major supermarkets in Croatia (e.g. Konzum, Ribola) tend to be more seasonal. Generally, you will be able to find year-round items such as apples, bananas, and cucumbers, other items such as beets and watermelon tend to be stocked only when they are in season, though this trend is quickly changing with the rapid rise of tourism.

The listed items also reflect a sample of groceries that a household might purchase, they are not recommendations about how much you should spend or what you should be spending it on. Food spending varies from one household to another based on a multitude of factors like income, the type of food you buy, and other factors.


Image: Pexels.

Relative costs of grocery spend

While grocery prices in Croatia are indeed cheaper, wages in Croatia are also significantly lower than in these comparative countries on the list. The average monthly wage of a Croatian employee before taxes stands at €1,265 as of 2021, compared to €5,643 in New York.

Thus, with this sample grocery trip, a Croatian living in Zagreb spends an average of 2.67% of their income, compared to 1.24% for a New Yorker. In Calgary, the average pre-tax monthly income is €3,257 and this grocery trip cost 1.46% of that income, while in Birmingham, where average monthly wages are €2,232, these groceries make up 1.68%.

This means that the relative cost of groceries for a Croatian employee is significantly higher compared to these countries due to wage disparities.

Food trends during the pandemic

Finally, the COVID pandemic requires the acknowledgment of two key trends that impacted household grocery spending between 2020-2022, which are not accurately reflected in this sample.

The first is that food at home expenditures (e.g., grocery spending) rose during this time, while food away from home expenditures decreased due to lockdowns and mandates such as work from home. Second, global Consumer Price Indexes reflect a dramatic increase in household inflation due to supply chain disruptions, poor growing conditions, and overall economic uncertainty.


Image: Pexels.

In the years 2021-2022, the UK Office for National Statistics reports that food prices are up 4.5%. In North America, the Bureau of Labor Statistics highlights that grocery prices are up 7.4%, while Statistics Canada shows that consumers are paying 5.7% more for food. Australia appears to be bucking this trend and although the Australian Bureau of Statistics reports consumer prices have risen by 3.5%, prices for food and non-alcoholic beverages increased by a modest 1.9%.

Croatia saw a vast 9.4% increase in food and non-alcoholic beverages. However, this remains on par with other EU countries such as the Czech Republic which saw a jump of 8.8%, and Estonia with an 11% increase in food prices.

Grocery prices

Now let’s delve into the cost of groceries starting with the 3 most populated cities in Croatia. All estimates were taken from the average prices at Numeo and Price World.       


In terms of food production, the World Bank highlights that Croatia is self-sufficient in the production of wheat, corn, poultry, eggs, seafood, and wine, but a big importer of pork, beef, and surprisingly, pet food.

The first pet food manufacturing plant was only established in 2019 in Virovitica, to capture part of the €118.5 million pet food market which is now dominated by German and Italian facilities.

1€ = 7.54 hrk


United States


Brooklyn bridge, New York. Image: Pexels.

In 2021, meat and fish prices rose most sharply with beef and veal prices increasing by 9.3%, pork by 8.6%, and fish and seafood prices by 5.4%. With these increases, Customer Expenditure Surveys by the Bureau of Labor and Statistics show that the average grocery spend per month for a household (between 1-3 people) is: $401.75/€53 in New York, $378.59/€04 in LA and $393.75/€45 for Houston

 (1€ = USD$1.13)



London, United Kingdom. Image: Pexels.

The Office for National Statistics revealed that the average food cost for a 2 member adult UK household in 2020 was £228/month (€261) or £57 (€65.55) weekly. In the past year, prices for fresh or frozen beef have risen 13%, while poultry is now 9.0% higher. Oils and condiments such as margarine and butter are also up between 12-16% over this time.

 (1€ = £0.84)



The CN Tower, Toronto. Image: Pexels.

The 2022 Canada’s Food Price Report predicts the average grocery bill for a family of 2 this year will amount to $7690.35 (€5,378) annually. This translates into $640.86 (€448.15) per month or $160 (€111.90) per week.

A significant increase in prices by 5-7% is also expected to affect dairy, vegetables, and bakery products this year.

(1€ = CAD$1.43)


Sydney Opera House. Image: Pexels.

In Australia, statistics show that between 2020-2021, the CPI rose by 3.5%. Specifically, Sydney saw a 3.1% increase in consumer prices, while Brisbane and Melbourne stood at 4.3% and 2.5% respectively. Price increases were mainly driven by dairy and related products which saw a rise of 1.7%, but this was offset by a reduction in prices of fruit by 1.2% due to favorable growing conditions.

A SunCorp report revealed that the average spend per week for groceries for a single individual amounted to $135 (€86.54), or $270 (€173.08) for a couple.

(1€ = AUD$1.56)
aussie_1.jpgWhile this merely scratches the surface of how to manage your retirement income, hopefully, it has shed some light on what the cost of everyday groceries is like in Croatia compared to where you may be living right now.  

For more, check out our lifestyle section.

Wednesday, 16 February 2022

Croatian Government Unveils €640 Million Support Package to Cushion Energy Price Rises

ZAGREB, 16 Feb 2022 - The Croatian government on Wednesday launched an HRK 4.8 billion (€640 million) package of measures aimed at shielding consumers from rising energy prices.

The package includes the capping of the growth of electricity prices to 9.6% and the growth in prices of gas to 20%.

Furthermore, the Value Added Tax (VAT) rate on gas supplies and some agricultural products will be lowered.

The package also provides a rebate on domestic energy bills.

Unveiling the set of measures, Prime Minister Andrej Plenković said today that the package had been prepared in a systematic manner, and is "timely and all-encompassing".

The package contains the measures targeting households, businesses and agricultural producers, Plenković said adding that the state-run Croatian power provider HEP will also bear a part of the burden to address the rising electricity prices.

The measures encompass tax reduction, subsidies for citizens at risk of energy poverty, and one-off discounts on energy bills for pension recipients, while businesses, farms and fisheries will be entitled to subsidies to cope with the rising energy costs.

Cap for electricity paid to make HRK 460 million disposable to households

The caps on the rise in prices of electricity will make HRK 460 million disposable to households.

The subsidies for households using gas will include HRK 0.10 per kilowatt-hour.

The support will be provided to micro businesses and SMEs with the average annual consumption of gas up to 10 gigawatt-hour, and the discount will be HRK 0.15 per kWh.

The VAT rate on gas and heating energy will be lowered from 25% to 13%, the same VAT already applied on power. The lower VAT is a permanent measure.

VAT will additionally be reduced to 5% on gas as a temporary measure, in place from 1 April 2022 to 31 March 2023.

VAT to be reduced on some food in bid to tackle rising cost of living for households

The VAT rates of 13% will be reduced to 5% for fresh meat, fish, eggs, fruits, vegetables, cooking oils, and baby food and the the standard 25% VAT rate will be slashed to 5% on some items in the agricultural production (fertilisers, plants etc.).

The package aimed at tackling rising costs of living also includes the reduction of the 25% VAT to 13% on feminine hygiene products, such as tampons and sanitary towels.

The coupons for electricity bills for senior citizens at risk of poverty will increase from 200 to 400 kuna a month and will now also be applicable to gas bills.

Pensioners whose monthly income is up to HRK 4,000 will be also entitled to payments between HRK 400 and 1,200 under the the energy support scheme. 

(€1 = HRK 7.523717)

For more, check out our politics and lifestyle section.

Page 1 of 2