One year has passed since Croatia joined the eurozone and the Schengen Area — so what has changed, and what are the prevailing sentiments among Croatians?
As of 1 January 2024, the requirement for dual price reporting has been abolished, and banks, the Financial Agency (FINA), and Croatian Post have ceased offering kuna exchange services. Kuna banknotes and coins can now be exchanged exclusively at the Croatian National Bank (HNB). The HNB imposes no limits on the quantity of kuna exchanged and charges no exchange fees. Banknotes will be exchangeable at the HNB indefinitely, while coins can be exchanged within three years of the euro’s introduction — that is, until 31 December 2025 at the latest.
By the end of last year, approximately 438.6 million of the 500 million banknotes that were in circulation and held in HNB reserves had been returned — representing 88%. However, of the 3 billion coins in circulation, only 760.5 million were returned, equating to just 25%. Comparing the remaining kuna cash in circulation with the 14.7 billion kuna that were in circulation at the end of last year, this represents a decline of approximately 68%.
The benefits of reduced transaction costs are already evident. The introduction of the euro and accession to the Schengen Area contributed to a successful 2023 tourist season, with entrepreneurs confirming that conducting business internationally has become easier and less costly.
Furthermore, the introduction of the euro has contributed significantly to improving Croatia’s credit rating — even from the moment the EU Council confirmed that Croatia had met all the conditions for euro adoption, as noted in the relevant analysis.
In terms of banking performance, the sector has done exceptionally well, recording significant growth in interest income. In the first three quarters of the year, Croatian banks posted a profit of €1.1 billion (compared to 5 billion kuna in the same period of the previous year, as reported by the HNB), and the return on equity rose from 8.2% at the end of 2022 to 16.9%. Profit for the first nine months of the year was therefore approximately 65% higher than in the same period of 2022.
The World Bank forecasts that the Croatian economy will achieve growth of 2.7% this year, accelerating slightly to 3% in 2025 — signalling stable and sustained economic development that is expected to outpace the European average by 2026.
Public Sentiment
Many Croatians approached the currency changeover with caution and some reluctance, despite the euro having been present in Croatia as a reserve currency since 2018. Scepticism centred on price increases and concerns about a declining standard of living. Price rises were particularly noticeable in the context of last year’s inflation and in tourist areas frequented by visitors from countries such as Germany, Italy, and Austria.
While Croatian consumers expressed concerns about price increases linked to the transition to the euro, an analysis by the European Central Bank found that the switch from the kuna to the euro had only a minimal impact on actual prices. It was primarily service providers — such as restaurants — that used the currency change as an opportunity to raise prices disproportionately.
Surveys conducted on the subject found that the most common responses to the question “How easy or difficult was it for you to adapt to the new currency?” were “easy” and “moderately difficult.” The currency changeover has also led Croatians to make payments by card more frequently.
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