Croatian Central Bank Governor Boris Vujcic said on Wednesday that the introduction of the euro should not result in any significant price increases, while next year the bank's main task will be the fight against a double-digit inflation rate and its reduction.

“If we look at the examples of countries that introduced the euro – and we are talking about nineteen countries – their experiences show that there was an increase in prices when the euro was introduced, but it was relatively small, ranging on average from 0.2% to 0.4%,” said Vujcic, who attended the Euro on Wheels educational project in Vukovar.

He noted, however, that the situation in which Croatia is introducing the euro is significantly different than the situation in which other euro area countries introduced the euro.

“We are in a situation of already high inflation, with prices rising for entirely different reasons and not because of the introduction of the euro. Because of this, we expect that the introduction of the euro itself will have a very small additional effect on price increases and that is certainly not what worries us the most. We are more concerned about the increase in the price of energy and food as a consequence of the war in Ukraine,” he noted.

When asked about the situation with interest on loans, Vujcic replied that at the moment there was still no spillover effect of central banks’ increase in interest rates on interest rates on loans.

As loans are tied to the Euribor, when the Euribor goes up, the spillover effect is likely to happen although it does not have to be completely transferred to loans as there have been cases when the Euribor increased but banks did not increase their interest rates, he said.

“Interest rates on loans are now significantly lower in Croatia than in countries that have not introduced the euro,” he said.

The Euro on Wheels project is being implemented as part of an information campaign taking place throughout Croatia ahead of the euro changeover, organised by the government and the Croatian Central Bank. The campaign was co-financed with EU funds.