Today, we’re bringing you an overview of the inflation in Croatia and Slovenia, what drove its growth, for the month of October 2025. In general, inflation grew by 0.5% MoM, 3.6% YoY in Croatia during the month, while in Slovenia, it remained the same MoM but grew by 3.1% YoY.
Croatia
Starting off with Croatia, the inflation rate in October 2025 amounted to 0.5% MoM and 3.6% YoY. This represents a deceleration from September (4.2% YoY) and August (4.1% YoY), but the higher rates in those months can be directly attributed to stronger demand during the summer tourist season, as well as a slight uptick in energy prices. Despite this decline, the inflation rate in Croatia was still among the highest in the Eurozone, with only Estonia and Latvia recording higher levels, while Croatia was tied with Austria.
Croatian CPI YoY growth rate (September 2015 – October 2025, %)
Source: DZS, InterCapital Research
Breaking down the main CPI drivers, prices of services grew by 6.4% YoY, meaning that services were the most inflationary component. Given that app. a quarter of the consumer basket used to calculate CPI is services, this alone added well over 1 p.p. increase to headline inflation. Key contributors include housing-related services, rents, tourism services, and other labor-intensive services, all of which have seen sticky high prices. Services inflation is also fueled by strong domestic demand, a tight labor market, and rising wages. Furthermore, public sector wage growth and higher rents also pushed up service costs. This persistent services inflation does indicate an underlying core price pressure on the economy.
Moving on, food and beverages, incl. tobacco prices, have grown by 4.4% YoY. With this category making a large part of the consumer basket, it alone contributed roughly 1.3 p.p. to 1.4 p.p. to the headline inflation. Factors influencing the growth higher include higher input costs (energy, transport, and fertilizers), and possibly markup increases, though there was some relief from global commodity price stabilization. It should be noted that the Government imposed a price cap on certain widely used food products in late 2024, which did temper food inflation for a time. However, due to strong demand, this was not enough to offset the price growth.
In terms of energy prices, they grew by 3.9% YoY in October, adding app. 0.6 p.p. to headline inflation. Earlier in 2025, energy actually had a disinflationary effect, as prices had stabilized, especially in terms of oil & gas, although this reversed with the coming of colder weather in autumn. Furthermore, the Government recently ended many price caps for, among other things, energy and its derivatives. This came into effect as of October 2025, resulting in higher utility and fuel costs. In September alone, housing/utility prices (which include energy) have already grown by 10% YoY. Due to the price cap expiry mentioned above, this trend is expected to continue.
Next up, industrial goods (excl. energy), fell by 0.2% YoY, exerting a slight downward trend on inflation. This was due to post-pandemic supply chain normalization, allowing goods inflation to ease. Furthermore, retailers faced competitive pressures and weaker demand for discretionary items, leading to only minimal price increases or even discounts. As such, tradable goods inflation has largely normalized after supply shocks of 2021 and 2022, as can be seen by flat or negative growth in this category.
On a MoM basis, the 0.5% rise was driven by season and energy factors. The strongest monthly jump was recorded in industrial goods, at 1.9% MoM. Energy prices also grew, at 0.8% MoM, while food prices declined slightly (-0.2% MoM). Lastly, service prices also declined a tiny bit, by 0.1% MoM.
In general, after a long period of sticky inflation, affecting broad parts of the economy, inflation expectations have also risen, leading firms to preemptively increase prices and workers to demand higher pay, also fueling inflation. Many categories show price stickiness, and those are the hardest to deal with, as the usual tools (key interest rate changes, subsidies, price caps) can either only affect inflation partially, or only for a short period of time.
Slovenia
Moving on to Slovenia, CPI remained unchanged MoM, while on an annual basis, it grew by 3.1%. This is closer to the EU’s average (2.1% in October) and significantly lower than Croatia’s inflation. It should be noted that Slovenia, unlike Croatia, experienced very low inflation in 2023, even sometimes at 0% or negative, largely due to falling energy prices and Government measures. However, by mid-2025, inflation picked up. August 2025 CPI stood at 3% YoY, up from only 0.9% YoY in August 2024. This rise could be partly attributed to a normalization effect, as energy and other prices stopped declining, the annual rate moved up from 2024’s unusually low base. Throughout 2025, Slovenia’s inflation remained moderate and stable, with monthly changes often flat or small. As such, Slovenia avoided the sharp mid-2025 spike that Croatia saw, due to the different economic setup & dynamics.
Slovenia CPI YoY growth rate (September 2015 – October 2025, %)
Source: SURS, InterCapital Research
In terms of the main growth drivers, we can look at the segmental breakdown. Food and non-alcoholic beverages were the single biggest driver, growing by 6.8% YoY and contributing 1.3 p.p. to the 3.1% headline inflation. Higher grocery costs, especially of staples like meat, dairy, and produce, have a strong effect on overall inflation due to this segment’s weight in the consumer basket. Higher food prices could be attributed to increased import costs, supply disruptions, and some poor regional harvests, which drove vegetable and grain prices. It should be noted that due to the slow inflation growth last year, the base was low, further magnifying the price jump in this category.
Next up, we have housing, water, electricity, gas, and other fuels, which together could be considered housing, utilities, and energy prices. These have grown by 4.2% YoY, adding about 0.5 p.p. to headline inflation. The biggest contribution came from higher energy costs and housing-related expenses. Notably, electricity and heating prices rose, with October’s data showing heat energy prices growing by just 6.3% MoM as the heating season started. Furthermore, Slovenia’s inflation in late 2024 was extremely low, partly due to utility tariffs being dropped or capped. By October 2025, those base effects were gone, and energy prices were higher.
In terms of health services costs, which include medical products, equipment, outpatient services, etc., they recorded a 5.5% growth YoY, contributing 0.3 p.p. to the annual inflation. This strong growth suggests that the costs of pharmaceuticals and healthcare services increased notably. While no detailed breakdown of this is available, this could be due to regulatory changes or increased co-payments, and higher demand for private medical services. Slovenia’s aging population, as well as the inefficient public health care system, also contributed to this increase.
Moving on, restaurant and hotel prices grew by 4.7% YoY, contributing app. 0.3 p.p. to headline inflation. This mirrors trends across the rest of Europe; even as overall inflation eased, hospitality services remained higher priced than a year before. Slovenian hotels and restaurants raised prices in 2023-2025 to cover higher wage bills and increased food input costs. In October 2025, there was a notable off-season price drop MoM in package holidays and accommodation, with package holiday prices dropping by 9%, a normal effect as the summer season ended. Despite this drop, on a YoY the level is still higher. This sustained YoY increase does suggest service sector inflation, which is milder, although similar to Croatia’s.
Meanwhile, alcohol and tobacco prices also grew, by 3.7% YoY, adding about 0.2 p.p. to inflation. While no detailed breakdown is available, this could be driven by excise tax changes or manufacturer price hikes. Additionally, beverage prices may have increased due to higher transport and production costs.
Lastly, looking at the miscellaneous & other category, most categories recorded small changes. For instance, clothing and footwear prices declined slightly (-0.1% YoY), transport costs grew by 0.7%, while telecom prices also declined by 0.1% YoY.
On a monthly basis, the unchanged inflation was impacted by items both growing and other items offsetting their growth. Clothing saw a 3.9% increase MoM, contributing 0.2 p.p. to the MoM inflation. Furniture and household equipment grew by 1.9%, adding 0.1 p.p. to headline inflation. Energy costs grew, with heat energy increasing 6.3% MoM, adding 0.1 p.p. to the overall number, while food prices also grew, by 0.5% MoM, contributing 0.1 p.p. to overall inflation.
On the other hand, package holidays declined by 9.2% MoM, decreasing the headline inflation by 0.4 p.p. MoM. Accommodation services also became 5.2% cheaper in the off-season, while insurance costs dropped by 2.8% MoM. Together, these decreases were enough, resulting in no net MoM CPI change.
Overall, in terms of inflation, it remains elevated in Slovenia, although its impact is not as strong or as broad as in Croatia. In the short term, Slovenia could partially or completely absorb the 3% inflation rate. During a prolonged period, however, it would result in purchasing power reduction and lower competitiveness.
HICP comparison between select European countries* (October 2025, YoY)
Source: Eurostat, respective countries’ statistical offices, InterCapital Research
*Includes only countries that have released their data; much of the data is based on estimates and is subject to change
Finally, taking a quick look at how Croatia and Slovenia compare to other countries, on a YoY basis, the largest increase in HICP was recorded by Estonia (+5.2% YoY), Latvia (+4.1% YoY), Croatia and Austria, both at 3.6%, Slovakia (+3.5% YoY), and Slovenia (+3.1% YoY). The EU average for the period was at 2.1%, with about 10 countries recording higher levels than this, and 11 countries recording lower levels. On the flip side, Greece recorded a YoY HICP inflation of only 0.1%, followed by Luxembourg at 0.2%, Spain and Portugal, both at 0.3%, and Belgium at 0.4%. A trend is also visible from the data, as the Middle European, South Eastern European, and Baltic countries recorded strong inflation, while Western and Southern European countries recorded lower growth. This could be due to the countries using their own currency (Czechia, Hungary, Poland), higher energy costs due to historical dependence on Russia (Hungary, Slovakia), and also faster GDP growth rates for most of these countries (excl. Germany and Austria). Other factors, of course, also played a role.