Most Croats Report Stable Financial Situation; Consumption, Employment, and Optimism on the Rise

Inflation and the potential decline in living standards are the leading challenges for Croatian citizens, as shown by the results of the MasterIndex survey conducted for Mastercard by the Improve agency in April this year. Nevertheless, the majority of respondents report a stable or improved financial situation compared to last year. An increase in consumption has been recorded in almost all categories, while citizens have found ways to save through shopping on sale, price comparison, and more frequent meal preparation at home.

Citizens Concerned About Rising Prices

The survey reveals that inflation, or rising prices, is the biggest concern for 64% of respondents. The decline in living standards is also a significant source of concern affecting nearly a third of respondents.

Crime and corruption rank high on the list of citizens’ worries (22% of citizens express great concern), and the list also includes adapting to the euro (12%), pollution and ecological disasters, an increase in the number of refugees (10% each), and a decline in the quality of education (8%). Citizens are no longer worried about the pandemic or any other health threat.

Young people aged 18 to 29 are most concerned about their inability to pay their own expenses and the rising unemployment rate or job loss, while middle-aged and older individuals are more concerned than average about disruptions in energy supply, declining living standards, and crime and corruption.

Positive Financial Outlook

The impact of macroeconomic events on employment indicates significant changes compared to the previous year. There are more employed individuals – those working for someone else (73%, an increase of 5%), while the share of self-employed individuals is 9%. In this segment, there is a higher proportion of those who have not felt any economic consequences or fear negative outcomes for their business.

When reflecting on the financial situation of households, 34% of respondents believe their financial situation is worse than a year ago, particularly among older individuals with lower education levels. However, there is also optimism – 27% of respondents see an improvement in their financial situation.

Compared to last year, the results are significantly more optimistic. More people expect their household’s financial situation to improve (31%, an increase of 5%). On the other hand, although 23% expect a worse financial situation for their household, this is significantly less than a year ago (a decrease of 17 percentage points).

We Spend More on Groceries and Are More Prone to Saving

The survey results show that current market disruptions, the energy crisis, and inflation have led to an increase in monthly consumption in 87% of respondents’ households. Of that number, 43% report that their consumption is significantly higher, while 44% say it is slightly higher. 10% of respondents indicate that their household consumption is at the same level as before, and 3% have reduced their expenses.

An increase in consumption has also been observed in almost all categories compared to the results from 2022. For example, two-thirds of respondents report spending more on groceries for home preparation compared to a year ago. 37% of respondents spend less on travel than before, and 42% spend less on restaurants. There is also a decline in food delivery (39% of respondents spend less on this service than before), followed by exhibitions, theaters, cinemas, and concerts (38%). Aside from groceries, spending has only increased on online and health services.

– The increase in consumption across almost all categories reflects market dynamics. To successfully respond to diverse consumer needs, retailers face the imperative of integrating various business channels – emphasized Gea Kariž, director of Mastercard in Croatia.

– Combining traditional business with digital, while providing a wide range of payment methods, helps establish stronger connections with customers, expand brand awareness, diversify the product range, and adjust prices to specific market demands. Our goal at Mastercard is for our partners – whether they are banks, fintech companies, telecommunications companies, or retailers – to have the resources and support to successfully adapt to this dynamic environment – she adds.

Shopping on Sale and Price Comparison Are the Main Ways to Save

To overcome the negative effects of inflation, people are engaging in various ways to save. The most common methods include shopping on sale and discounts (63%), comparing prices in different stores (55%), and more frequent meal preparation at home (47%). Just over a third of respondents believe it is not the time for larger investments (37%), save by using devices during cheaper electricity hours (36%), or are generally more focused on energy savings than before (33%).

The survey also revealed that women are more inclined to various saving methods compared to men – shopping on sale or discounts, forgoing the purchase of household appliances, focusing on energy savings, and selling items they do not use.