The final decision on the introduction of the euro as legal tender in Croatia will be made in June, the Jutarnji List daily of Friday reports, noting that inflation in Croatia is higher than allowed by the Council of the EU, but that the Council will take the energy crisis into account.

As regards Croatia’s accession to the euro area, the consensus is that “it is very likely”.

The final decision will be known in June, when the EC and the European Central Bank are to release a report with an assessment as to whether member-states that have still not introduced the euro, including Croatia, meet the convergence criteria.

Unofficial information in that regard should be known already at the end of May.

Officials at the Croatian National Bank expect a positive assessment considering trends in Croatia and the EU and relevant reference values for criteria of price stability, public finance sustainability and stability, exchange rate stability and long-term interest rate convergence.

The most problematic criterion so far has been inflation, to be measured for the period from April 2021 to April 2022. According to nominal criteria, it should not exceed the average in three countries with the lowest inflation rates during a period of 12 months, increased by 1.5 percentage points.

In the period from March 2021 to March 2022 the lowest inflation was reported by Greece, Portugal and Malta, with the average standing at 2.1%. Increased by 1.5 pp, it means that the inflation rate in Croatia can be a maximum 3.6%, Marina Tkalec of the Zagreb Institute of Economics says.

However, in the said period inflation in Croatia was 4.1%. Since a similar result can be expected for the April 2021 – April 2022 period, it turns out Croatia does not meet the reference criterion for inflation. Still, Tkalec believes the final assessment will be positive, the daily says.