Just under one in five Croatians has incurred excessive debt since the outbreak of the pandemic.

Within a very short time, the Covid-19 pandemic has turned our lives upside down. From a financial perspective in particular, the pandemic has forced a lot of people to reconsider planned expenditures or to take on debt just to make ends meet. Croatian consumers have also felt the impact of the crisis. The Covid-19 Financial Report commissioned by the EOS Group shows that many of them have even slipped into excessive debt over the last year.

Overview of key findings:

  • The financial situation of Croatian consumers is deteriorating as a consequence of Covid-19.
  • Around one in five was forced to take on debt as a result of the pandemic.
  • 18 percent of Croatians have slipped into excessive debt since the beginning of the crisis.
  • The crisis has hit single parents particularly hard, with one in three having to borrow money to get through the crisis.

Although the pandemic is a global crisis, every nation and population group is affected differently. Within the scope of the Covid-19 Financial Report, which online poll specialist Dynata conducted on behalf of EOS, 1,000 Croatian consumers provided information about how the pandemic has affected their consumption patterns and debt situation.

Covid-19 Financial Report: Consumers had to take on debt during the Covid-19 crisis.

One in five respondents took on debt that they are unable to pay back.

Croatians are borrowing money to cover their living expenses and housing costs.

So far, around one in five Croatian consumers (19 percent) has incurred debt as a result of the Covid-19 crisis. At just under 69 and 30 percent respectively, most of them used the money they borrowed to cover their ongoing living expenses and housing costs, while around one in four (23 percent) used it for health-related expenses. The amount of debt was generally between HRK 7,501 and 18,800.

Covid-19 Financial Report: Barbara Cerinski, Managing Director of EOS in Croatia
It’s perfectly understandable if people are forced to take on debt temporarily to cover the necessities of life. We are in an exceptional situation and at present, nobody can reliably predict how it will develop. Barbara Cerinski, Managing Director of EOS in Croatia

Single parents suffering particular hardship amid the crisis.

Sole parents have been the hardest hit by the pandemic, with around one in three (33 percent) having to take on debt to survive the crisis financially. It therefore is not surprising that it is sole parents who are the most pessimistic about the future: 29 percent of them assume that they will have to take on new debt in the coming months. A third (36 percent) are not sure whether they will make it through the crisis without help.

Covid-19 Financial Report: Consumers have ended up with excessive debt in the course of the Covid-19 crisis.

Since the outbreak of the pandemic, 18 percent of those polled have ended up with excessive debt.

“It’s perfectly understandable if people are forced to take on debt temporarily to cover the necessities of life. We are in an exceptional situation and at present, nobody can reliably predict how it will develop,” says Barbara Cerinski, Managing Director of EOS in Croatia. For 18 percent of those polled, this has meant that they have slipped into excessive debt since the start of the pandemic and can no longer pay back their debts. Here too, sole parents have been hit hardest, with just under one in three (31 percent) of them being unable to pay back their debts amid the crisis.

A look at the international comparison in the report reveals that as far as debt is concerned, consumers in other countries have been affected to a similar or even worse extent. 12 percent of respondents in Germany, 15 percent in Spain, 28 percent in Romania and as many as 32 percent in Bulgaria said that they have incurred debts due to the pandemic. Looking to the future, 20 percent of Croatian consumers fear that that they are going to have to take on debt in the next few months.

What is excessive debt?

Excessive debt refers to a situation where the debt incurred by a person or a company exceeds their own assets. In the case of private individuals this is usually preceded by an unexpected event like the sudden loss of a job or a serious illness. However, poor money management can also often result in excessive debt.

Consumer behaviors: Going without renovations, new furniture – and health?

First work then play.

The difficult financial situation of many Croatians is also reflected in their consumption patterns. In this context, a major factor is likely to be the devastating earthquake in December 2020 that affected more than 35,000 buildings. The majority of respondents by far (45 percent) stated that they had decided not to carry out planned renovation work during the pandemic. Much smaller numbers of consumers were refraining from spending on items like furniture (31 percent) and vacations (25 percent). Even spending on health (14 percent) and education (11 percent) had to be cut, something that sets off alarm bells for Barbara Cerinski: “When financial resources are tight it makes sense to cut your spending on things that are not absolutely necessary. However, if your health suffers as a result, this is a matter of concern.” 

With a view to an eventual end to the crisis, a majority of respondents (40 percent) said they would prioritize spending on their planned renovation work. Spending on travel only comes in second place (29 percent) for Croatian consumers. This sets them clearly apart from the consumers of other countries in the results of the Covid-19 Financial Report, because for Spaniards (67 percent), Romanians (65 percent), Germans and Bulgarians (each 60 percent), having a vacation is the clear spending priority.

The Covid-19 Financial Report reveals how consumers are experiencing the crisis.

The aim of the Covid-19 Financial Report is to show how consumers in various countries have experienced the pandemic so far. In this context, the focus is on their financial situation and how this has changed in the course of the crisis. What effect did the crisis have on people’s consumption patterns? To what extent and for what reasons did consumers have to take on debt, and were they able to pay it back? To find this out, online polling specialist Dynata surveyed 7,000 people from five European countries about their circumstances on behalf of EOS. As well as Croatians, consumers from Germany, Romania, Bulgaria and Spain also took part. The results indicate which population group is affected by the crisis and to what extent, and show the kind of personal payment difficulties that consumers can reckon with in the future.

If you would like to take a look at the detailed results of the survey please don’t hesitate to contact us.

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