Croatia: Questions raised over HNB and bank roles in rising living costs

In Croatia, questions are being raised regarding the role of the Croatian National Bank (HNB) and commercial banks in driving up the cost of living and housing prices. Critics suggest that monetary policy and credit expansion following Croatia's entry into the eurozone may have contributed to inflationary pressures.

Specifically, the reduction of the mandatory reserve requirement from 9 percent to 1 percent reportedly freed up over five billion euros, potentially enabling significant credit expansion. This increase in lending is cited as a factor that has stimulated demand in the real estate market and other economic sectors.