There is no end in sight to inflation, costs and investments in advertising are being cut

Although both private and business sectors are feeling the negative impact of inflation on budgets and are concerned related to this, there is still no room for panic.

3 min to read
Written by: Nataša Blagojević

In daily discussions in the business sector, as well as in the media, inflation has been in focus for months. Considering the record price growth rates recorded in June and July, through our August Vox Populi poll, we decided to check what our followers’ thoughts are about the current situation, the impact of inflation on everyday life and business, but also what are the forecasts for the future and how quickly we will recover.

More than half (64%) of the participants in our survey are very concerned about inflation and price movements. Although they are mostly worried, about the same number (54%) think that the situation is tolerable for now, while 46% think it is worrying. It is therefore not surprising that the vast majority of respondents (78%) are still not hoarding household supplies due to the rising prices of products and services. When it comes to the key causes of inflation, two thirds of the survey participants believe that the war events in Ukraine are “to blame”. A third of them thinks that the main cause of inflation is the global coronavirus pandemic.

Inflation will last longer than a year

The attitudes of our followers indicate caution and thoughts about the future, while 41% of them are concerned with panic. Also, they pessimistically forecast further growth of inflation – 91% of participants in the Vox Populi survey declared that prices will continue to rise until the end of the year, and even 73% of them believe that inflation will last longer than 12 months. Opinions are divided about what the Croatian government will do in the fight against rampant prices. A slight advantage is given to borrowing (54%), while 44% believe that taxes will soon increase in Croatia.

Companies are focused on cost control

We especially tried to look at this complex topic through the prism of business entities. As many as 85% of responses indicate that inflation has had a negative impact on the business of their companies, which they struggle with primarily through cost control (86%). According to our followers, a very small percentage (14%) of companies respond to inflation with innovation and an agile approach to business. It is therefore not surprising that the impact of inflation is mostly seen through budget cuts (71%), while some companies rely on business reorganization (29%). Although forecasts are generally pessimistic about the duration of inflation, when it comes to business recovery, the responses somewhat indicate a bit more optimism. Almost half of the respondents believe that their company’s operations will stabilize within 12 months.

Investments in advertising are being cut

When it comes to communication and advertising, marketing investments are being reduced in most companies(71%), and it is mostly about cutting the budget for the next year (73%). Reducing the budget to a somewhat greater extent will be reflected in the advertising budget, i.e., media buying (60%), than in other communication activities. Given that a high 82% of survey participants believe that communication in times of inflation should be bolder, despite the announced cuts, let’s hope that this means more exciting campaigns in the months ahead.


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