Consumer spending in Croatia reached a record-breaking level in 2021 as Croatians spent 17.5 billion kuna in December alone.

“The data on record-breaking spending in December partly surprised us, but that’s what we expected. You could see that the whole of last year was really good, notably the 5% increase in the value of fiscalised receipts compared with 2019,” Finance Minister Zdravko Maric said in an interview with HTV public television on Monday evening.

Maric said that the record for last month was set on 23 December when nearly 8 million fiscalised receipts were issued and their value reached nearly 900 million kuna. He noted that 13 August 2021 holds the record since the fiscalisation system was introduced, when nearly a billion fiscalised receipts were issued in a single day.

Maric said that the government’s original growth forecast for last year was 5%. “The last projection was 9%, and by all indications we have reached the border of the two-digit growth rate. This indeed is a very good result and we will be among the top three (EU) countries with the highest growth in 2021,” he predicted.

Speaking of challenges ahead, notably those concerning the COVID pandemic, Maric mentioned inflation and disruptions to global supply chains. “In my opinion, these are the two biggest risks to our macroeconomic projections. However, there are a great deal of or at least several strong positive factors, first and foremost the implementation of the National Recovery and Resilience Plan and our path towards the euro zone and Schengen.”

Maric said that the government has moved from the job retention phase to the job creation phase, noting that the labour shortage is one of the main issues that needs to be addressed. “That’s why all these measures concerning active employment policy, which should lead to higher employment and higher wages, should be fully supported.”

2022 inflation projected at around 3.5%

Speaking of inflation, Maric said that inflation has picked up in recent months and that for the most part it has been imported, citing prices of raw materials and oil and supply chain disruptions. This has resulted in inflation spilling over to a wide range of items, notably food and fuels, he added.

“As for our projections, we will have data for December in the coming days. We expect that inflation will continue to accelerate as it did in the first half of the year. Based on the available data, average inflation for 2022 is projected at around 3.5%,” the finance minister said.

Maric said that based on this estimate, it could be concluded that prices in 2022 would grow somewhat faster than wages, but added that there were several strong drivers that would push wages upwards.

“On the one hand, there is a labour shortage, so employers will be forced to increase wages, while on the other hand, active employment policy measures will make their contribution. In case price growth is higher than wage growth, which is still not certain, but if that happens, the difference will not be such as to substantially endanger the living standards of Croatian citizens,” Maric said.