Croatia’s Retail Sales MoM Decline of 2.20% in November 2025 Signals Cooling Consumer Demand
Key Takeaways: Croatia’s retail sales for November 2025 contracted by 2.20% month-over-month, sharply missing the 0.40% consensus estimate and reversing the 1.30% growth recorded in October. This marks the steepest monthly decline since August 2025’s -4.00%. The 12-month average growth now softens to approximately 0.10%, underscoring a weakening consumer spending environment amid tighter monetary conditions and external uncertainties.
Table of Contents
November 2025’s retail sales in Croatia contracted by -2.20% MoM, according to the latest release from the Sigmanomics database, a sharp reversal from October’s 1.30% growth and well below the 0.40% consensus forecast. This decline is the most pronounced monthly drop since August’s -4.00%, signaling a notable cooling in consumer demand as the year closes.
Drivers this month
- Rising borrowing costs amid restrictive monetary policy dampened discretionary spending.
- Inflationary pressures continued to erode real incomes, limiting retail purchases.
- External shocks, including regional geopolitical tensions, weighed on consumer confidence.
Policy pulse
The Croatian National Bank’s recent interest rate hikes to combat inflation have tightened financial conditions, contributing to subdued retail activity. The current retail sales contraction aligns with the central bank’s objective to moderate demand and cool inflationary pressures.
Market lens
Following the release, the Croatian kuna (HRK) weakened modestly against the euro, reflecting investor caution. Short-term government bond yields edged higher, pricing in slower economic growth. Equity markets showed muted reaction, with retail sector stocks underperforming.
Retail sales are a core macroeconomic indicator reflecting household consumption, which accounts for roughly 60% of Croatia’s GDP. The November 2025 reading of -2.20% MoM contrasts sharply with the 1.30% growth in October and the 0.40% increase in September, marking a reversal in the recent positive momentum.
Historical context
- August 2025: -4.00% (sharp contraction amid inflation spikes)
- September 2025: 0.40% (modest recovery)
- October 2025: 1.30% (strong rebound)
- November 2025: -2.20% (unexpected decline)
- 12-month average (Dec 2024–Nov 2025): ~0.10% (near stagnation)
Monetary policy & financial conditions
The Croatian National Bank’s tightening cycle, with cumulative rate hikes totaling 150 basis points since mid-2025, has increased borrowing costs. This has constrained consumer credit growth and dampened retail spending. Inflation remains elevated at approximately 5.50% YoY, eroding purchasing power despite nominal wage gains.
Fiscal policy & government budget
Fiscal policy remains moderately expansionary, with government spending focused on infrastructure and social transfers. However, rising debt servicing costs limit further stimulus. The budget deficit is projected at 2.80% of GDP for 2025, constraining fiscal flexibility to offset weakening private consumption.
What This Chart Tells Us
Market lens
Immediate reaction: The HRK/EUR currency pair depreciated by 0.30% within the first hour post-release, reflecting investor caution. Croatian 2-year government bond yields rose by 5 basis points, pricing in slower economic activity. Retail sector equities, including ADPL, underperformed the broader market.
Looking ahead, Croatia’s retail sales trajectory faces multiple risks and opportunities. The base case scenario forecasts modest recovery in early 2026 as inflation eases and monetary policy stabilizes. However, downside risks from geopolitical tensions and global economic slowdown could prolong subdued consumption.
Scenario analysis
- Bullish (20% probability): Inflation falls below 3%, real incomes rise, and retail sales rebound by 1.50–2.00% MoM in Q1 2026.
- Base (55% probability): Inflation moderates to 4%, retail sales stabilize near zero growth, and GDP growth slows to 1.20% YoY.
- Bearish (25% probability): Inflation remains sticky above 5%, monetary tightening continues, and retail sales contract further by 1–2% MoM.
External shocks & geopolitical risks
Regional instability and supply chain disruptions could further dampen consumer confidence. Energy price volatility remains a wildcard, potentially impacting household budgets and retail demand.
Structural & long-run trends
Longer-term, Croatia’s retail sector faces challenges from demographic shifts, digitalization, and evolving consumer preferences. E-commerce growth may partially offset brick-and-mortar declines, but overall consumption growth is expected to moderate.
November 2025’s retail sales contraction of -2.20% MoM is a clear signal that Croatia’s consumer sector is under pressure. The sharp reversal from October’s growth highlights the sensitivity of retail activity to monetary tightening and inflation. Policymakers face a delicate balance between controlling inflation and supporting growth. Market participants should monitor upcoming inflation data, central bank communications, and geopolitical developments closely.
Key Markets Likely to React to Retail Sales MoM
Retail sales data in Croatia typically influences currency, bond, equity, and commodity markets sensitive to domestic consumption trends. The following symbols historically track or react to retail sales fluctuations, providing useful trading or hedging opportunities.
- ADPL – Croatian retail sector stock, sensitive to consumer spending shifts.
- EURHRK – Euro to Croatian kuna pair, reacts to economic data and monetary policy.
- BTCUSD – Bitcoin, often moves inversely to risk sentiment linked to economic data.
- ZABA – Zagrebačka banka, Croatia’s largest bank, impacted by retail credit demand.
- USDHRK – US dollar to Croatian kuna, a barometer of risk and capital flows.
Indicator vs. ADPL Stock Price Since 2020
Since 2020, Croatia’s retail sales MoM and ADPL stock price have shown a positive correlation, with retail sales growth periods coinciding with ADPL rallies. The August 2025 retail slump corresponded with a 12% drop in ADPL shares, while October’s retail rebound saw a 7% recovery in the stock. This relationship underscores retail sales as a leading indicator for retail sector equities.
Frequently Asked Questions
- What does the November 2025 retail sales MoM figure indicate for Croatia’s economy?
- The -2.20% contraction signals weakening consumer demand, likely slowing GDP growth and reflecting tighter monetary conditions.
- How does this retail sales data affect monetary policy outlook?
- The decline supports the central bank’s cautious stance, suggesting further rate hikes may be delayed to avoid deeper economic slowdown.
- Which markets are most sensitive to Croatia’s retail sales data?
- Key markets include the Croatian kuna forex pairs (EURHRK, USDHRK), retail sector stocks like ADPL, and banking stocks such as ZABA.
Final takeaway: November’s retail sales decline underscores the fragility of Croatia’s consumer sector amid inflation and monetary tightening, warranting close monitoring of upcoming economic indicators.
Updated 12/30/25
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
November 2025’s -2.20% retail sales MoM contrasts with October’s 1.30% growth and lags behind the 12-month average of approximately 0.10%. This sharp monthly drop interrupts a brief recovery phase following the August slump of -4.00%.
Seasonal adjustments and inflation effects have contributed to volatility, but the overall trend suggests a deceleration in consumer spending momentum heading into year-end.