As of February 2025, Croatia saw a CPI increase of 3.6% YoY and a decrease of 0.2% MoM, showing a modest reduction in the inflationary pressures from previous months. Despite this easing, the pressures remain present, although they have lessened both YoY and MoM. Slovenia’s more moderate inflation growth of 1.6% YoY and 0.3% MoM reflects a stable, well-diversified economy and a more appropriate fiscal policy.
Croatia
Based on the latest data from the Croatian Bureau of Statistics, annual CPI eased 0.4 p.p. YoY to 3.6%, which showcases that the annual CPI fell for the first time since September 2024, when it dropped by 0.2 p.p. from 1.8% to 1.6% YoY. Additionally, the CPI decreased by 0.2 p.p. on a MoM basis from January 2025.
Croatian CPI YoY growth rate (February 2015 – February 2025, %)
Source: Croatian Bureau of Statistics, InterCapital Research
Diving deeper into the components of inflation, we can see that the main catalyst is the service component, with 5.7% YoY for food, beverages, and tobacco, followed by 4.9% YoY for energy, with 3.4% YoY. On a monthly basis, the components of food, beverages, tobacco, and non-food industrial goods excluding energy each saw a decrease of 0.4%, while energy experienced an estimated increase of 0.6%. Meanwhile, the prices of Services remained stable.
Despite this MoM easing, Croatia is continuing to experience inflationary pressures, which are assisted by already well-known fiscal expansion with growing wages and noticeable GDP growth.
Slovenia
According to data from the Slovenian Statistical Office, the annual CPI increased by 1.6% YoY, down from a CPI of 3.4% in February 2024. On a monthly basis, it showed a modest increase of 0.3% MoM.
The primary drivers of annual inflation included a significant 2.8% increase in the prices of food and non-alcoholic beverages that were impacted by 0.5 p.p. to inflation growth. Over the year, service prices saw an average increase of 3.2%, while goods prices rose by 0.7%. Specifically, semi-durable goods prices increased by 1.3% and non-durable goods by 0.9%. However, durable goods prices decreased by 0.4%. Transportation costs, up by 2.7%, added 0.4 p.p., and prices in restaurants and hotels, up by 4.6%, contributed 0.3 p.p..
Slovenian CPI YoY growth rate (February 2015 – February 2025, %)
Source: SURS, InterCapital Research
Conversely, the most notable monthly influence stemmed from a 10.9% increase in package holiday prices, significantly impacting inflation. However, a 9.7% MoM decrease in the prices of housing, water, electricity, gas, and other fuels offset inflation by 0.6 p.p..
In February, the surge in package holiday prices by 10.9% had the most substantial monthly effect on inflation, contributing 0.4 p.p.. Other significant monthly price increases included clothing (up by 2.8%), water supply and miscellaneous dwelling services (up by 2.2%), and food (up by 0.4%), each adding 0.1 p.p. to inflation. Additionally, price hikes in the operation of personal transport equipment, particularly diesel (up by 2.1%), petrol (up by 1.8%), and costs related to driving such as lessons, tests, licenses, and road worthiness tests (up by 1.8%), also contributed 0.1 p.p. to inflation. Collectively, other price increases contributed another 0.1 p.p..
Electricity, gas, and town gas prices dropped by 9.7% on average, substantially reducing the monthly inflation by 0.6 p.p., primarily due to electricity being 20.1% cheaper.
The harmonized index of consumer prices in the EU (HICP)
A concise review of the harmonized index of consumer prices (HICP) reveals that Croatia saw a notable annual growth of 4.7%, and on a monthly basis it remained still. Conversely, Slovenia experienced an annual increase of 1.9% in the HICP, with a rise of 0.2% on a monthly basis
HICP YoY change for selected EU countries (February 2025, %)
Source: Eurostat, InterCapital Research
In comparison to the broader Euro area, where annual inflation is expected to hit 2.4% in February 2025—down from 2.5% in January as per Eurostat’s preliminary figures—Croatia’s inflation rate stands significantly higher, while Slovenia is relatively stable at 1.9%
Overall, this data positions Croatia significantly above the Euro area average. Breaking down the components of Euro area inflation, services are expected to have the highest annual rate in February at 3.7%, a decrease from 3.9% in January. This is followed by an increase in the inflation rates for food, alcohol, and tobacco, which are expected to rise to 2.7% from 2.3% in January. Non-energy industrial goods are projected to see a slight increase to 0.6% from 0.5%, while energy is forecasted to register a minimal rate of 0.2%, a significant decline from 1.9% in January. These trends indicate further challenges in achieving the Euro area’s target inflation rate of 2%, as the ECB continues to lower interest rates in response to the sluggish growth across the European economy.
