Inflation and potential decline in living standards are the leading challenges for citizens of Croatia, as shown by the results of the MasterIndex survey conducted by the Improve agency for Mastercard in April this year. However, the majority of respondents report a stable or improved financial situation compared to the previous year. Increased spending has been recorded in almost all categories, while citizens have found ways to save through shopping on sales, price comparisons, and more frequent home-cooked meals.
Citizens concerned about price increases
The research reveals that inflation, or rising prices, is the biggest concern for 64% of respondents. Decreased living standards are also a significant source of worry, affecting nearly one-third of respondents. Crime and corruption rank high on the list of citizens' concerns (22% express great concern), followed by adjusting to the euro (12%), pollution and environmental disasters, increased number of refugees (10% each), and a decline in education quality (8%). Citizens are no longer concerned about the pandemic or other health threats.
Young individuals aged 18 to 29 are most worried about their inability to cover their own expenses and an increase in unemployment rates or job loss. On the other hand, middle-aged and older individuals are more concerned than average about disruptions in energy supply, reduced 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 employees working for someone else (73%, a 5% increase), while self-employed individuals account for 9%. In this segment, a higher percentage of people have not felt any economic consequences or fear negative outcomes for their business.
Looking at household financial situations, 34% of respondents believe their financial situation is worse than a year ago, with a focus on older individuals with lower education levels. However, there is also optimism, as 27% of respondents see an improvement in their financial situation. Compared to the previous year, the results are significantly more optimistic. More people expect their household's financial situation to improve (31%, a 5% increase). On the other hand, while 23% expect a worse financial situation for their household, it is significantly lower than a year ago (a 17 percentage point decrease).
We spend more on groceries and are more inclined to save
The research results show that current market disruptions, the energy crisis, and inflation have led to increased monthly spending in 87% of surveyed households. Of those, 43% report significantly higher spending, while 44% report slightly higher spending. 10% of respondents state that their household spending is at the same level as before, and 3% have reduced costs.
There has also been an increase in spending in almost all categories compared to the 2022 results. For example, two-thirds of respondents say they spend more on groceries for home cooking compared to a year ago. 37% of respondents spend less on travel, and 42% spend less on restaurants. Food delivery is also down (39% spend less on this service), followed by exhibitions, theaters, cinemas, and concerts (38%). Only internet and healthcare services see an increase in spending alongside groceries.
"The increase in spending in almost all categories reflects market dynamics. To successfully respond to diverse consumer needs, retailers are faced with the imperative of integrating different business channels," emphasized Gea Kariž, Director of Mastercard in Croatia. "Combining traditional and digital business, providing a wide range of payment methods, helps establish stronger connections with customers, raise brand awareness, diversify the range, and adjust prices to specific market demands. Our goal at Mastercard is to provide our partners - whether they are banks, fintech companies, telecommunications companies, or retailers - with the means and support for successful adaptation to this dynamic environment."
