According to the flash estimate released by the Croatian Bureau of Statistics, the Croatian CPI increased by 5.8% YoY, and 0.4% MoM in October 2023.
The first flash estimate of Croatian CPI by the Croatian Bureau of Statistics (DZS) has been released, for the month of October 2023. According to the estimate, the Croatian CPI increased by 5.8% YoY, and 0.4% MoM.
Croatian CPI YoY growth (February 2013 – October 2023, %)
Source: Croatian Bureau of Statistics, InterCapital Research
Breaking the CPI down by main components, on a YoY basis, the largest increase was recorded by Food, beverages, and tobacco, which increased by 8.1%, followed by Services at 7.3%, and Non-food industrial goods with energy at 5.6%. On the other hand, prices in Energy decreased by 0.2% YoY. Meanwhile, on a MoM basis, the largest increase was recorded in Non-food industrial goods without energy, at 2.4%, followed by Services at 0.4%. All other components recorded a decrease, with the largest one being Energy at 1.1% MoM, followed by Food, beverages, and tobacco at 0.5%.
It should be noted that the final data for the October 2023 CPI will be released on 16 November 2023. Thus far in 2023 (since the start of the flash estimate releases), the changes between the flash estimate and the final data were minimal, either being the same or increasing/decreasing by 0.1 p.p. compared to the estimate. The harmonized index of consumer prices, HICP has also been released, for select European countries. The HICP would allow us to compare the Croatian inflation rates with those countries.
Comparison of HICP change with available European countries (October 2023, YoY, %)
Source: Eurostat, InterCapital Research
Overall, in the Euro area on an annual basis, the inflation rate slowed down to 2.9%, with some countries even recording a decrease in inflation. However, Croatia still ranks as the country with the 2nd highest HICP, at 6.7%, only behind Slovakia’s 7.8%. Slovenia is following Croatia closely in this regard, at 6.6%. On the other hand, Belgium and Netherlands recorded decreases in HICP, of 1.7% and 1%, respectively.
Comparison of HICP change with available European countries (October 2023, MoM, %)
Source: Eurostat, InterCapital Research
Meanwhile, on a MoM basis, Croatia recorded a 0.2% HICP increase, which is in line with most of the other countries. However, it should be noted that even more countries recorded negative HICP in October, with 7 countries in total. Malta leads this leads, with a 1.2% decline, followed by Estonia at 0.5%, as well as Portugal and Cyprus at 0.4%, respectively.
As we can see from this data, the inflation increase did somewhat subside, which could be explained by the growth in food and beverages, as well as services due to the tourist season. However, it also has to be noted that inflation data is somewhat skewed on a YoY level, as the inflation rate was already high in the same period last year, leading to a higher base, and thus “lower” relative growth. However, it still stands to reason that the inflation rate remains elevated and sticky. Given that the winter is also coming, the current geopolitical uncertainty also leaves room open for more inflationary pressures, mainly coming from higher energy prices. As such, it would be too early and naïve to conclude that inflation rates are actually coming down in Croatia, even if the YoY growth implies such a statement.
