Inflation may accelerate in Croatia – vacations will become more expensive

By: Trademagazin Date: 2025. 09. 12. 10:46

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Croatia’s economic growth will remain relatively strong in 2025 and 2026, but according to the latest forecast of the Croatian National Bank (CNB), inflation could be higher than expected, while wage dynamics and employment are slowing. Rising energy and food prices could also make the country more expensive for tourists, so it is not advisable to consider the Croatian market as an “escape route” from inflation.

According to CNB data, Croatia’s GDP grew by 3.9 percent in 2024, but according to forecasts, the expansion will slow to an average of 3 percent in 2025 and 2026. Although real incomes will continue to rise, the pace of growth will gradually moderate, which will restrain consumption, especially due to rising food prices.

Investments may still remain strong thanks to EU funds, but the price competitiveness of tourism is deteriorating. Exports of services in 2026 are expected to barely exceed the 2024 level, while an increasing proportion of the Croatian population chooses to travel abroad, which increases imports of services. This has a negative impact on net external demand.

Employment growth is expected to slow to 2.7 percent in 2025 from 3.3 percent in 2024, and to 1.8 percent in 2026. The unemployment rate is expected to fall to 4.5 percent by 2026. Average wage growth is expected to slow from around 15 percent in 2025 to below 10 percent, while real wage growth is expected to slow from 12 percent to 6 percent.

Based on the harmonized consumer price index, inflation may reach 4.2 percent in 2025 after 4 percent in 2024, while the national index will accelerate to 3.6 percent from the previous 3. The increase in prices is primarily driven by the increase in gas, electricity and heat prices in late 2024 and early 2025, as well as the persistent increase in food prices. The increase in food prices is also being driven by higher raw material prices, the incorporation of wages into costs and strong domestic demand.

According to the CNB, the increase in prices may slow down from 2026, but the costs of a holiday in Croatia may be even higher in 2025. So anyone who hoped to escape Hungarian inflation to their neighbor may be disappointed: Croatian prices are also on the rise.