As of June 2025, Croatia’s CPI rose by 3.7% YoY and 0.3% MoM, marking the third consecutive acceleration in annual inflation and placing Croatia among the Eurozone’s highest-inflation countries. Slovenia, in contrast, recorded a more contained CPI increase of 2.2% YoY and 0.8% MoM, driven primarily by seasonal movements in tourism-related categories and food. Despite this short-term push, inflation in Slovenia remains stable and aligned with euro area norms, with very little deviation between CPI and HICP.

Croatia

According to final CPI data from the Croatian Bureau of Statistics, consumer prices increased by 3.7% YoY in June 2025, after 3.5% in May. On a monthly basis, prices rose by 0.3 percent, with upward pressure from services, food, and energy. Services remained the dominant contributor, rising by 6.7% YoY, a reflection of strong domestic demand and the start of the high season. Food, beverages, and tobacco rose by 5.2% YoY, while energy prices were up by 3.0%. Non-food industrial goods excluding energy remained the only deflationary component, declining by 0.4% YoY.

On a monthly basis, service prices rose by 1.0 percent, while food and energy each increased by 0.3 percent. Non-food industrial goods excluding energy declined by 0.7 percent, partially offsetting upward pressure. These four components form the core of Croatia’s CPI structure. Altogether, they resulted in a 0.3 percent MoM CPI increase, broadly in line with prior months but still reflecting firm seasonal and domestic demand.

The Ministry of Finance continues to stand by its projection that the average inflation rate for 2025 will land at 3.0 percent. If that is the case, we should expect some easing in the second half of the year, following these current elevated prints. But that assumption hinges on whether domestic demand slows down, and at this point, we are not seeing much evidence of that.

Croatian CPI YoY growth rate (June 2015 – June 2025, %)

Source: DZS, InterCapital Research

Of course, the start of the main tourist season is contributing significantly to current inflation numbers. Data from the coast is solid, more fiscalised receipts, stronger turnover, and visibly more tourists compared to the same period last year. This is clearly pushing prices up, particularly in services. We can also see this reflected in the noticeable delta between the CPI and the HICP, since the HICP includes spending by international tourists. So yes, tourism matters and is clearly part of the story.

But it is not the only one. A major part of what we are seeing is coming from domestic drivers. Wage growth in Croatia is among the highest in the EU, and that is feeding purchasing power, which is in turn fuelling consumption across a wide range of categories, not just tourism-related. This is keeping demand elevated and price pressures sticky, especially in services, which have been the key inflation component for months now.

We should also not ignore the broader monetary backdrop. The ECB has started cutting rates, aiming to respond to softening inflation trends across the euro area. But for Croatia, this is not textbook cyclical behaviour. We are in a different part of the cycle, and instead of acting as a stabiliser, the rate cuts are stimulating demand even more. What is meant to be accommodative elsewhere is turning pro-cyclical here.

Still, there are signs that some cooling may be coming. From this month onward, access to credit has become more restrictive due to new macroprudential measures introduced by the Croatian National Bank. These stricter lending criteria could start to limit household consumption. However, unless there is a broader shift in household expectations and spending patterns, this tightening alone is unlikely to materially bend the inflation curve in the short term.

Slovenia

Slovenia’s CPI increased by 2.2% YoY in June 2025, compared to 1.5% in the same month last year. On a monthly basis, inflation stood at 0.8%. As expected, the acceleration was largely seasonal. Package holiday prices rose by 9.1% MoM, contributing 0.4 percentage points to the monthly figure, while food prices increased by 1.2%, adding another 0.2 percentage points.

Food and non-alcoholic beverages recorded a 6.7% YoY increase, contributing 1.2 percentage points to the headline rate. Restaurants and hotels followed with a 5.0% rise, contributing 0.4 percentage points. Alcohol and tobacco, healthcare, and recreation and culture each added 0.2 percentage points. On the other side, the housing, water, electricity, gas, and other fuels category declined by 1.5% YoY, subtracting 0.2 percentage points from overall inflation.

Slovenia CPI YoY growth rate (June 2015 – June 2025, %)

Source: SURS, InterCapital Research

In the first half of 2025, prices increased by 2.6%, slightly above the 2.3% recorded in the same period last year. The strongest growth was recorded in recreation and culture, which rose by 8.4%, followed by restaurants and hotels, food, healthcare, and alcohol and tobacco. The only major component in decline was housing and utilities.

The data confirms that Slovenia remains in a balanced inflation environment. Short-term pressures are visible, but structurally there is no indication of overheating or persistent price drift.

The harmonised index of consumer prices in the EU (HICP)

Measured by the harmonised index of consumer prices, Croatia recorded a YoY increase of 4.4% in June 2025, with a 0.8% monthly rise. This places Croatia firmly in the upper tier of euro area inflation performers, alongside Estonia at 5.2% and Slovakia at 4.6%. While the tourist season clearly affects these numbers, the broader inflationary impulse comes from within. Strong wage growth, fiscal spending, and robust domestic demand continue to fuel the divergence. Despite the official projection of a 3.0% average for the year, Croatia remains well above that trajectory for now.

The harmonised index of consumer prices in the EU (HICP)

Source: Eurostat, InterCapital Research

Slovenia’s HICP came in at 2.5% YoY and 0.6% MoM. The gap between HICP and the national CPI is minimal, indicating that external tourism and foreign demand are not distorting the index. Services rose by 4.0% YoY, goods by 1.6%, while durable goods prices declined by 0.7%. Non-durables rose by 2.5% and semi-durables by 0.7%. Slovenia continues to reflect price movements in line with euro area averages and shows no signs of underlying inflation instability.

All in all, the divergence between Croatia and Slovenia underscores the growing fragmentation of inflation dynamics within the euro area. Croatia continues to experience persistent, structurally driven inflation, supported by strong wage growth, resilient domestic demand, and intensified tourism activity. Slovenia, in comparison, shows a more cyclical and seasonally influenced inflation pattern, with underlying trends that remain relatively well anchored. Although both economies operate under the same monetary framework, their domestic fundamentals are clearly pulling them in different directions. This divergence is not just temporary but increasingly structural, and it is likely to shape how each economy responds to further policy moves and macro shifts in the quarters ahead.