Croatia's adoption of the euro took place in an economically and geopolitically turbulent environment, at a time of the highest inflation in advanced economies in the last four decades. The confluence of different factors complicates the assessment of the impacts of euro adoption.
2/3  BIS - Central bankers' speeches  In generally, adoption of the euro by a small economy brings higher price transparency and competition, lowers transaction and borrowing costs, reduces currency risks and makes it easier for domestic firms to do business in foreign markets. In both countries, the introduction of the euro was accompanied by concerns about price increases.