As of August 2025, Croatia recorded a CPI increase of 4.1% YoY and 0.1% MoM, underscoring the persistence of underlying price pressures, particularly in services and food-related categories. In Slovenia, consumer prices rose by 3.0% YoY, while remaining flat on a monthly basis, suggesting continued stability in inflation dynamics. Despite differing inflationary impulses, Slovenia remains broadly aligned with Euro area trends, whereas Croatia continues to exhibit elevated domestically driven inflation momentum.

Croatia

Croatian inflation remains structurally elevated. According to the flash estimate for August 2025, headline CPI rose by 4.1% YoY, while MoM growth was modest at 0.1%, reflecting persistent underlying price pressures despite subdued monthly dynamics.

The composition of inflation reveals a continuation of previously observed trends. Services remain the most inflationary segment, with prices rising 6.4% YoY and 1.4% MoM, underpinned by public sector wage dynamics, rent inflation, and seasonal effects. The price stickiness in this category reflects strong domestic demand, especially in tourism and housing-related services, where structural constraints are proving difficult to unwind.

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

Source: Croatian Bureau of Statistics, InterCapital Research

Food, beverages and tobacco followed closely, rising 6.2% YoY and 0.2% MoM, continuing to weigh disproportionately on lower-income households due to their high basket weight. These price pressures appear persistent despite some easing in upstream commodity markets.

On the other side, energy prices, which had been a notable disinflationary force earlier in the year, increased 2.5% YoY but fell 1.0% MoM, reflecting seasonal fluctuations and spot market corrections. Meanwhile, non-food industrial goods excluding energy remained largely benign, rising just 0.5% YoY and declining 0.7% MoM, further supporting the narrative that tradable goods inflation has broadly normalised post-supply chain recovery.

When assessed through the harmonised lens, Croatia’s HICP reached 4.6% YoY and 0.2% MoM, placing the country again among the top inflation performers in the EU, exceeded only by Estonia. Underlying dynamics suggest inflation is increasingly rooted in domestic cost pressures, particularly in services and wages, with a tight labour market and elevated employment supporting price resilience. Despite falling unemployment and strong job creation, these frictions continue to delay broader price convergence with the Euro area, which remains anchored near 2%.

Slovenia

Slovenian consumer price inflation remained unchanged in August 2025 on a monthly basis, while the YoY CPI rate rose to 3.0%, marking a substantial increase from last year’s 0.9% YoY print. Despite this rebound, inflation dynamics remain orderly and do not suggest overheating; the trend points to seasonal and category-specific pressures rather than broad-based acceleration. Slovenia’s inflation pattern shows a clear seasonal character, but remains fundamentally anchored, without signs of deeper macroeconomic imbalance.

At the component level, services prices rose by 3.1% YoY, slightly above the 3.0% YoY increase in goods prices. Among goods, semi-durable goods registered the strongest momentum at +5.2% YoY, followed by non-durable goods at +3.2%, while durable goods remained nearly flat at +0.3% YoY. These dynamics reflect limited pass-through from global supply chains, as most upward movement stems from domestic demand factors.

Slovenian CPI YoY growth rate (Jun 2015 – Aug 2025, %)

Source: SURS, InterCapital Research

The structure of inflation remains skewed toward a few key categories. Food and non-alcoholic beverages posted the highest annual growth at +7.6% YoY, contributing +1.4 p.p. to the overall CPI figure, a familiar pattern in Slovenia’s recent inflation profile. Other meaningful contributors included clothing and footwear (+6.9%) and restaurants and hotels (+5.1%), each adding +0.4 p.p. to headline inflation. In contrast, housing, water, electricity and fuels (+0.5%) and transport (–1.1%) had a muted or disinflationary impact, aligning with broader European energy market dynamics and base effects from 2024.

At the MoM level, inflation was flat, with offsetting forces. On the upside, package holidays (+1.1%) and food (+0.3%) jointly contributed +0.2 p.p., a typical seasonal push in August. However, this was fully neutralized by declines in footwear prices (–5.7%) and operation of personal transport equipment (–1.3%), each subtracting –0.1 p.p., keeping monthly inflation in check.

The Harmonised Index of Consumer Prices (HICP) came in at +3.0% YoY, flat compared to July and but up from last year’s 1.1%. On a monthly basis, HICP also registered 0.0% MoM. Services led with +3.7% YoY, while goods inflation stood at +2.5% YoY, underscoring a continued resilience in core price categories despite weaker external pressures.

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

Source: Eurostat, InterCapital Research

From a macro lens, Slovenia’s inflation remains among the more well-anchored within the CEE region, standing at 3.0% YoY HICP in August 2025. This is notably below Croatia’s 4.6%, which continues to reflect persistent demand-side pressures and tight labor market dynamics. In contrast, structural drivers in Slovenia, such as contained wage pressures, normalizing energy prices, and the disinflationary effect of euro strength, have helped limit pass-through effects to consumer prices. The Slovenian labor market remains firm but not overheated, and private consumption is underpinned by steady income growth rather than fiscal largesse or tourism-related demand spikes. Unlike Croatia, where services inflation and domestic demand remain elevated, Slovenia’s inflation path remains more aligned with the Euro area convergence process.

Overall, the latest data highlights Croatia’s persistent inflationary momentum, driven largely by internal demand factors and sticky service prices, keeping it at the higher end of the regional inflation spectrum. Slovenia, by contrast, continues to show more measured and seasonal inflation dynamics, closely aligned with broader Euro area trends. While Romania and other CEE countries still exhibit elevated inflation, the contrast between Croatia and Slovenia serves as a clear example of the heterogeneity in inflation normalization across the eurozone and its periphery.