Zagreb - Croatian National Bank (HNB) Deputy Governor Sandra Švaljek said on Thursday that inflation accelerated in February and could remain around last year’s level of about 4.5% under the baseline scenario.
Presenting a report to parliament, Švaljek said inflation rose to 3.8% in February from 3.4% in January (3.9% vs 3.6% under the harmonised index). Updated projections, factoring in the Middle East conflict, are due by the end of the week.
She warned higher energy prices and uncertainty could dampen domestic demand and keep inflation above earlier expectations. Economic growth is projected at about 2.5% on average over the next two years, while inflation, previously seen at 3.5% this year, may instead remain at around 4.5% annually or slightly higher.
Švaljek noted inflation in Croatia remains persistently above the euro area average, with cumulative price growth of about 34% between 2021 and 2025, compared with 13.2% in the euro area.
She said GDP grew strongly in 2024 and continued to expand in early 2025, albeit more slowly, while interest rates declined and financing conditions improved, particularly for housing loans. Macroprudential measures introduced in July 2025 curbed consumer lending, especially unsecured cash loans, and halted the extension of housing loan maturities.
More than 10,000 basic bank accounts had been opened by the end of February, with nearly 100,000 accounts offering free service packages, she added. An EU legislative package on the digital euro is expected this year, potentially enabling its use from 2029.
Opposition MPs criticised the authorities over high inflation, with Ivica Ledenko (Bridge) accusing the HNB of failing to protect citizens' living standards, while Sanja Radolović (SDP) blamed Prime Minister "Plenković’s inflation of greed". Ruling party MPs rejected the criticism, saying government policies were the only viable way to sustain growth and social stability.