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Lagarde: inflation in Croatia due to high economic growth

by AI | 16.Jun 2024 | Europe in brief AI

The President of the European Central Bank says that slightly higher inflation in Croatia is partly a result of high economic growth and the introduction of the euro.

Christine Lagarde, President of the European Central Bank, speaks during an informal meeting between the EU finance ministers and central bank governors. Photo: Caisa Rasmussen/TT News Agency/AP/dpa

DUBROVNIK – President of the European Central Bank (ECB) Christine Lagarde said on Friday that Croatia has a slightly higher inflation rate than the eurozone average, but this is also due to the fact that its economic growth is among the highest of the member countries of this monetary union.

Lagarde attended the 30th International Economic Conference of the Croatian National Bank (HNB) in Dubrovnik, and in a joint statement to the media with HNB Governor Boris Vujčić, the ECB head highlighted that it is her first time in Croatia as a eurozone member, praising the efforts of the authorities in introducing the common European currency.

The introduction of the euro has influenced inflation growth in other countries as well, including Croatia, but according to Lagarde, this effect was mild, estimated on average at around 0.4 percent.

Challenges are present, but the ECB head believes that the trend of falling inflation will continue, and according to ECB estimates, inflation should reach the target level of around two percent in the second half of 2025.

Asked why inflation in Croatia is among the highest in the eurozone, Lagarde pointed out that Croatia also has one of the highest economic growth rates in the eurozone, so its inflation is above average.

“The two often go together,” said Lagarde, also noting that the unemployment rate in Croatia is lower than the eurozone average.

The eurozone has 20 members, and the ECB must implement a monetary policy that is good for the entire monetary union, she added. (June 14, 2024.)