According to the latest report by DZS, the average Croatian net wages amounted to EUR 1,141 in July 2023. On a MoM basis, this is a decrease of 0.8% nominally and 1% in real terms. On the other hand, on a YoY basis, this represents a nominal increase of 13.4% and an increase in real terms of 5.7%. Taking a quick look at a comparison from 3 years ago, in real terms the wage growth actually amounted to only 3.2%, meaning that if we were to average it over the 3 years, it would mean that the average wage only grew by a little over 1% each year.

The latest statistic regarding wages in Croatia has been released by the Croatian Bureau of Statistics, DZS. According to the report, the average gross wage in Croatia amounted to EUR 1,580, representing a nominal decrease of 0.6% MoM, and a real decrease of 0.8%. Furthermore, the average Croatian net wage in July 2023 amounted to EUR 1,141, representing a decrease of 0.8% MoM in nominal, and 1% in real terms. In terms of the yearly change, the average gross wage is 15.5% higher in nominal terms, and 7.6% higher in real terms. The average net wage, on the other hand, is 13.4% higher in nominal, and 5.6% higher in real terms YoY.

Average gross and net wage in Croatia (EUR, left, 2015 – July 2023), (YoY real growth rate, %, right, 2016 – July 2023)

Source: DZS, InterCapital Research

However, the average wage by itself does not tell us much, as it could mean that there are people who are earning significantly more, and then people who are earning a lot less compared to it. In this case, looking at the median wages is more prudent, as the median represents the middle value (meaning 50% of people earn less than the median value, and 50% of people earn more). In this regard, the median net wage for July 2023 amounted to EUR 984, while the median gross wage amounted to EUR 1,325. In terms of growth, the median net wage increased by 9.7% in nominal terms, and 7.1% in nominal terms.

Median gross and net wage (EUR, left, 2016 – July 2023), (YoY real growth rate, %, right, 2017 – July 2023)

Source: DZS, InterCapital Research

In terms of the breakdown of net wages by activity sections, the highest average net wage amounted to EUR 1,549 in the Information and communication section. Following it, we have Human health and social work activities, with an average net wage of EUR 1,448, as well as Financial and insurance activities, with an average net wage of EUR 1,446. On the other hand, the lowest average net wage was paid in Administrative and support service activities, at EUR 926, followed by Other service activities at EUR 941, Construction, at EUR 944, and Accommodation and food service activities, at EUR 956.

Finally, taking a quick look at a comparison from 3 years ago, before inflation started to have a huge impact, there are some interesting observations to be made. In July 2020, the average net wage amounted to EUR 892, meaning that by July 2023, it increased by 27.9% nominally. However, in real terms, the wage growth actually amounted to only 3.2%, meaning that if we were to average it over the 3 years, it would mean that the average wage only grew by a little over 1% each year. This would seem like a really dismal result, meaning that on average, after taking out inflation (which by itself is an imperfect measure), Croatians are able to purchase only a little over 3% more goods than they were able to three years ago.

Cumulative inflation and net wage growth in the last 3 years (%, July 2020 – July 2023, July 2020=100)

Source: DZS, InterCapital Research