"Strong employment and wage growth driven by economic growth over the past two years has had a positive impact on consumer optimism. At the same time, the saving ratio, i.e. the share of income remaining after consumption, recovered somewhat from its low levels two years ago, when it fell sharply due to rising food and energy prices. However, the savings ratio is still below the multi-year average recorded before the pandemic," said the CNB's Chief Economist Vedran Šošić today at a roundtable marking World Savings Day at the Croatian Chamber of Economy in Zagreb.

He pointed out that consumer optimism has also been supported by strong household borrowing since the beginning of 2023, with some loans being granted at elevated ratios of the repayment burden to income, which could increase the risk of loan repayment in a possible adverse economic scenario. On the other hand, debt increases from a very low level, which somewhat mitigates these risks.

"Citizens are increasingly investing their savings in real estate. Estimates show that cash in circulation is also growing, which is related to the restoration of cash stocks approximately to the levels recorded before the introduction of the euro," said Šošić.