The latest print for the inflation in Croatia and Slovenia came out recently, and one thing is certain – inflation remains elevated in both countries, although the trend does note moderation. Croatia recorded an annual inflation of 3.3% YoY in December, down from 3.8% in November, while on a MoM basis, prices declined by 0.4%, after a 0.6% MoM increase in November. On the other hand, Slovenia recorded an annual inflation of 2.7% YoY during the month, up from 2.3% in November, while on a MoM basis, the CPI remained unchanged. For a more detailed overview, continue reading below.
Croatia
Starting off with Croatia, the inflation rate amounted to 3.3% YoY in December, while on a MoM basis, it declined by 0.4%. This represents a slowdown from the 3.8% YoY increase in November, and a 0.6% MoM increase during the same month. Services and food have been the primary drivers of inflation, while the goods inflation has been rather mild. Services prices grew by 6.3% YoY during the month, continuing to be the fastest-growing component of the CPI. Several factors contributed to this, but rising prices and costs in the hospitality and tourism sector were the primary ones. Next up, Food and non-alcoholic beverages grew by 3.1% YoY, and given the size of this segment in the overall inflation, it still had a notable contribution.
Croatian inflation (September 2015 – December 2025, % growth YoY)
Source: DZS, InterCapital Research
Some comments by the Central Bank could be added on this, as they noted that the tourism sector had “the highest contribution to the growth of inflation” in 2025. This can also be seen in November’s print – restaurant and hotel prices grew by 7.3% YoY during the month. Energy prices also played a role, with a 3.9% YoY increase in December, which is contrary to the deflationary trend seen in the rest of Europe. This can be seen more clearly if we look at the housing, water, electricity, gas and other fuels component of the CPI, which recorded an even stronger 8.8% YoY increase in November, primarily due to the end of the government subsidies and price caps.
On the other hand, non-energy industrial goods prices have been nearly flat, rising only by 0.1% YoY, and also recording negative growth in some of the months preceding December. In general, inflation pressures remain strong in Croatia, driven by still sticky inflation of services and food, but also further boosted by the energy policy changes. However, it should be noted that Croatia also recorded significant GDP growth (both nominal and real), as well as increases in real wages, spurring consumption and allowing for higher spending on services and food & beverages.
Slovenia
On the other hand, Slovenia recorded an annual inflation of 2.7% YoY in December, while the MoM inflation was flat compared to November. This represents a 0.4 p.p. increase from November’s 2.3% growth YoY, indicating that there is some speed up in the inflation rate. Slovenia’s inflation was driven by a somewhat different mix than Croatia’s. In their case, food and housing costs were the primary drivers.
Slovenian inflation (September 2015 – December 2025, % growth YoY)
Source: SURS, InterCapital Research
In particular, food and non-alcoholic beverages recorded a 4.5% increase YoY, contributing 0.8 p.p. to the headline inflation. This was influenced by some remaining global food commodity prices, but also local factors such as drought/supply issues, but also high consumer demand. Meanwhile, housing, utilities, and energy component of the CPI grew by 4.3% YoY, adding 0.5 p.p. to inflation, reflecting higher costs of electricity, home heating and rent. Slovenia did intervene and reduce electricity prices in 2023, which means that prices in early 2025 were lower than those in 2024. However, as the base effect faded, electricity and gas prices saw increases. As such, while energy prices were deflationary in early 2025, they turned around to being a large contributor to its overall growth later in the year.
Moving on, service prices in Slovenia grew by 3.6% YoY in December, outpacing goods at 2.3%. The largest increases were seen in health services, which grew by 5.9% YoY, and restaurants and hotels, which increased by 4% YoY, each adding app. 0.3 p.p. to the headline inflation. Several factors contributed to this, including strong demand for travel, recreation and personal services, as well as higher wage costs, also supporting these increases. On the other hand, transport costs had a reductionary effect on inflation, with a negative growth of -0.7% YoY, as both petrol and diesel were cheaper YoY. This reflected global energy trends, as average oil prices in 2025 were lower compared with 2024. This trend was also reflected in Slovenia’s temporary cut to excise taxes on fuel in November, which aimed to blunt the impact. In general, Slovenia’s inflation could be seen as broad-based but moderate, with most categories recording price increases in the low single digits. Even the faster-growing categories, such as food, utilities and services, grew at a 4-6% range, which is significantly lower than the levels seen in the previous years. As such, it could be said that Slovenia recorded a more balanced and contained inflation environment compared to Croatia.
HICP inflation comparison between select European countries (December 2025, % growth YoY)
Source: Eurostat, DZS, SURS, InterCapital Research
Lastly, taking a look at the HICP comparison, Croatia recorded a 3.8% YoY increase, while Slovenia grew by 2.6% YoY. Croatia ranks 4th among the select EU countries, behind Slovakia & Estonia (both at 4.1%), and Austria at 3.8%. The slight difference here for Croatia can be attributed to tourism, as HICP also measures its contribution to inflation, while for Slovenia, it recorded a slightly lower number than the headline inflation.
In general, both countries are trending towards the EU target of 2%, although levels remain above those seen in most other European countries. Slovenia has a better chance of reaching that target, while the price growth of food & services continues to be sticky in Croatia, meaning that a longer time will be needed for the inflation rate to reach that target.