Thursday, 24 November 2022

Euro in Croatia: How to Pay for December Utility Bills due in January

November 24, 2022 - Euro in Croatia: on the first day of 2023, the euro will become the official currency in Croatia. Paying in kuna (only in cash) will be possible until January 14. Preparations for the introduction of the euro in Croatia from January 1, 2023, are proceeding without any problems and according to plan, as was pointed out this week at the session of the National Council for the introduction of the euro.

As Poslovni / N1 write, Croatian citizens are already mostly familiar with what awaits them from the first of January. One of the questions that remain, however, is what will happen to the utility bills for December, which will arrive in January.

The utility bills for the December consumption will be issued in January 2023 and will be expressed in euros, according to the Croatian Association of Bankers.

For all payment slips that the citizens receive in advance and on which the amount of payment is in kuna, and they pay them after the introduction of the euro, the bank is obliged to make payment in euro in the amount corresponding to the amount of kuna specified on the payment order. The bank will act this way until July 1, 2023, says the Croatian Association of Bankers.

It is crucial to emphasize, they remind, that from the 5th of September until the 31st of December 2022, the dual pricing continues. This means that the final amount of the bill will be in HRK and EUR with the fixed conversion rate specified.

There are exceptions to that:

  • value shown for prepaid electronic communication services (prepaid vouchers)
  • the value and amount stated on the payment order based on an invoice or other individual document, i.e. based on the displayed price
  • the value shown on cards for public payphones
  • the value printed on the SIM card packaging

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

Wednesday, 12 October 2022

Allianz Global Wealth Report 2022: Here is Where Croatia Ranked

October 12, 2022 - With net financial assets of EUR 14,400 per capita, Croatia is currently in 35th place on the list of the world's wealthiest countries, which is led by the US, according to the the13th edition of the Allianz Global Wealth Report published on Wednesday.

Poslovni writes, as pointed out in the analysis, that last year was the third year in which global financial assets recorded double-digit growth and reached 233,000 billion euros. But 2022 marks a turning point, with the war in Ukraine halting the post-Covid-19 pandemic recovery and "turning the world upside down." Allianz wrote that inflation has taken off, there is a shortage of energy and food, and the tightened monetary policy is "suffocating" the economy and the market, adding that the wealth of households will feel the consequences.

"Global financial assets will fall by more than two percent this year, the first significant decline since the so-called great financial crisis of 2008. In reality, households will lose a tenth of their wealth. However, unlike the major financial crisis, which was followed by a relatively quick turnaround, the medium-term forecasts are quite pessimistic this time. Namely, it is expected that the average nominal growth of financial assets will amount to 4.6 percent until 2025, compared to 10.4 percent in the previous three years", says the Allianz forecast.

Allianz Chief Economist Ludovic Subran said that 2021 marked the end of an era. "The past three years have been exceptional, and for most depositors, they represented a period of prosperity. But this year and the coming years will be different. The cost of living crisis will test the concept of the social contract. Policymakers face the enormous challenge of mastering the energy crisis, implementing a green transformation, and stimulating growth while simultaneously curbing monetary policy. There is no more room for any mistakes in policies. The key to success lies in innovative and targeted measures at the national level, as well as in European unity at the supranational level", read Subran's statement, reported in the publication.

"A real danger of a debt crisis"

Allianz also expressed concern about the level of global household debt, which at the end of 2021 amounted to 52,000 billion euros, with high annual growth of 7.6 percent. At the same time, an increasing share of this debt is held by emerging economies, primarily Asia, with the exception of Japan.

"We are concerned about the sudden debt growth at the beginning of the global recession. Over the past decade, household debt in emerging markets has grown at double-digit rates, five times faster than growth in advanced economies. Still, overall debt levels appear manageable. However, given the unfavourable structural conditions faced by the aforementioned markets, there is a real danger of a debt crisis," said Patricia Pelayo Romero, co-author of the Allianz report.

The gross financial assets of Croatian households jumped by 10.9 percent last year.

The gross financial assets of Croatian households amounted to EUR 79 billion last year, with an annual jump of 10.9 percent, the highest growth in the past ten years.

"This outstanding performance was based on all three major asset classes and was driven by dynamic equity markets combined with massive savings efforts," Allianz wrote. After two strong years, they stated, total net inflows last year reached 7.2 billion euros, almost three times more than the long-term average. Nearly half of the new savings were converted into bank deposits, representing the most popular form of savings in Croatia, i.e., 49 percent of total assets. Thus, this category of assets achieved a growth of as much as 9.5 percent, despite "no" interest rates, Allianz said.

Furthermore, savings in the form of investments in shares, investment funds, and other securities recorded the highest growth rate of all asset categories, by 12.7 percent. "However, given its share in the portfolio of only 21 percent, it is clear that Croatian households still invest only a small part of their savings in capital market products, even significantly less than the average in Eastern Europe, which is 34 percent," they noted.

Among other things, insurance and pension products recorded a strong growth of 11.1 percent, whereby savers in Croatia invest 27 percent of their financial wealth in this asset category, which is almost ten percentage points more than they invested at the beginning the previous decade. On the other hand, there was a significant increase in debt last year, by four percent, much higher than the long-term average of 0.8 percent. In the same period, the debt ratio (liabilities as a percentage of GDP) fell by about six percentage points to 36 percent. Net financial assets, however, amounted to 58 billion euros, achieving a growth of 13.7 percent, according to data from the report.

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

Monday, 7 January 2019

Croatians Still Preferring Cash over Bank and Credit Cards

Germans could be left without cash if a threat of a general strike of 12,000 employees who transport money to ATMs is fulfilled. Although they could quickly pay with their bank and credit cards, the lack of cash would anger the Germans, since they, just like Croatians, like to pay with cash. On the other hand, some countries in northern Europe are even thinking about the abandonment of cash money altogether. Advocates say this approach would eradicate the grey economy and tax evasion, while the opponents warn about a loss of privacy, reports Večernji List on January 7, 2019.

The popularity of cash, despite the simplicity and security of bank card payments, is even growing in some countries. Germans, like Croats, make as much as 80 per cent of transactions with cash. According to the data of the Croatian National Bank, of the 179 million recorded receipts in 2017, as much as 87 per cent was paid in cash. However, the value of card transactions has grown to 37 per cent of the total turnover.

It should be noted that the largest card turnover is recorded during the summer and that 12 per cent of the amount of all card transactions is made with foreign cards, so it is likely that tourists mostly use them. If we take this into account, we can conclude that Croats pay with cards for just a quarter of their purchases. And they use much more their bank debit cards than credit cards.

Nevertheless, the popularity of bank cards is growing year after year, as well as the value of card transactions. Every consumer has 2.5 cards on average, and 79 per cent of citizens have at least one card. This shows that the problem is not the access to bank cards, but the will of the citizens to use them.

Local craftsmen and caterers mostly insist on cash payments, and the unwritten rule is that discounts are more substantial if you pay with banknotes. The reason is the high payment fees that card companies contract with the sellers of services and goods. Since these fees are often, especially in the case of a new company that has no financial history, higher than five per cent, entrepreneurs must increase their prices for that amount. As a rule, fees range from two to five per cent, and this cost is transferred to the consumers. That is why customers usually pay more with bank cards, especially in the case of larger purchases, which typically bring five per cent extra discount if you are ready to pay with cash.

On the other hand, Americans pay for almost half of all transactions with bank cards. Sweden and Norway are moving towards full cash elimination. In Sweden, for example, in five years the share of cash transactions fell from 50 per cent to just 20 per cent. Swedes trust banks and institutions and research has shown that they are not worried by either the 'Big Brother' issue or internet fraud. They recently abolished the largest banknotes, claiming that only criminals use them, and they consider the abandonment of cash an excellent way to fight the grey economy.

More news on the Croatian economy can be found in our Business section.

Translated from Večernji List (reported by Marina Šunjerga).

Tuesday, 13 November 2018

UnionPay, World’s Largest Card Payment Organisation, Coming to Croatia?

American Express cardholders will be able to use them until the end of 2019. Which replacement service will they opt for will depend on what the card companies will offer them. Therefore, some banks, as well as marketing agencies, have already begun preparations, including advertising campaigns, trying to win over some of about half a million American Express users in Croatia. PBZ is the licensed American Express partner in Croatia and earlier this year the bank announced activities that will allow card users to “continue with the uninterrupted use of all services and related benefits.” Unofficial sources say that PBZ will offer its customers UnionPay cards, owned by the world's largest card issuer, China UnionPay, reports Jutarnji List on November 13, 2018.

The Chinese card organisation has issued about five billion credits cards, and in 2015 it has overtaken the former leading card issuer Visa. PBZ said it could neither confirm nor deny its possible cooperation with UnionPay. “Our users have a high level of confidence in PBZ Group, which is confirmed by our research which shows that they fully believe that PBZ Card will offer high-quality replacement cards,” the bank said.

The latest events are also a chance for Diners to expand in the Croatian market. Its cards in Croatia are issued by Erste Card Club, which currently has 380,000 credit cards (Diners, Visa and MasterCard). At the moment, they see “high-quality opportunities for further growth and development of card business in the Croatian market.” Therefore, they are intensively working on "introducing new services, with an emphasis on improving the digital user experience.”

Recently, a fully digitized application process for issuing Diners Club credit cards has been introduced. New members can request a card without delivering paperwork or coming to a branch office, and the process is available to all citizens, irrespective of whether they are Erste Bank customers or not.

Given that American Express credit cards will be managed by the issuer itself in the future, it is expected they will no longer be in widespread use in Croatia, except at the corporate level. Amex has abandoned its licensing business model due to EU payment legislation, which limits multilateral fees charged by credit card issuers.

For more on banks in Croatia, click here.

Translated from Jutarnji List (reported by Marina Klepo).

Monday, 7 May 2018

Innovative Companies to Have Easier Access to Financing

ZAGREB, May 7, 2018 - The European Investment Fund (EIF) and UniCredit on Monday signed an agreement giving innovative companies access to 340 million euro.

Sunday, 18 February 2018

Zagreb Stock Exchange Launches Platform for SMEs

ZAGREB, February 18, 2018 - The Zagreb Stock Exchange (ZSE) has launched a new trading platform intended for small and medium-sized enterprises in order to make it possible for them to have access to capital at all stages of their growth.

Wednesday, 14 February 2018

More than 50% of Croats Are Financially Illiterate

ZAGREB, February 14, 2018 - Finance Minister Zdravko Marić said on Wednesday that Croatia was above the global average in financial literacy but that there was a lot of room for progress given that more than half of citizens could not be defined as financially literate.

Wednesday, 30 August 2017

Over 1,000 Personal Bankruptcy Proceedings Initiated

For the procedure to be launched, a person has to be more than 30,000 kunas in debt.

Monday, 15 May 2017

Croatia to Leave Excessive Deficit Procedure?

“The debt and the deficit have fallen, and Croatia is finally on the right path,” says the Finance Minister.

Tuesday, 20 September 2016

In Croatia, 619 Persons File for Personal Bankruptcy

Small number of personal bankruptcies is not a sign that people have a lot of money, but only that this is still a new legal option which is unknown to many.

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