Croatians spent a record high 14.85 billion kuna (€2 billion) in December 2018, up by 7 percent compared to the same period in 2017, the Croatian Chamber of Economy (HGK) said on Wednesday.

The HGK said that the figures, collected by the tax authority, indicated that a recent set of tax breaks introduced by the government had had a positive effect on Croatians’ optimism and spending habits.

An important factor in boosting spending was the decision to increase the non-taxable limit for year-end bonuses, which incentivised employers to pay out higher Christmas bonuses or other one-off rewards in late 2018.

The positive trends in spending also means that overall annual retail turnover might finally recover to reach its pre-crisis 2008 level by next year, and even surpass it in 2020, HGK said.

The estimate is based on the steady growth of retail sales, which have been increasing since 2014. Over the first ten months of 2018, total retail sales were 4.2 percent higher compared to the same period in 2017.

(€1 = 7.41 kuna)

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