The highest growth in the CPI was recorded in the transport prices, which increased by 19%, followed by Food and non-alcoholic beverages, which grew by 15.2%, and Restaurants and hotels, which increased by 12.1% YoY.
The Croatian Bureau of Statistics has published the monthly report on the developments of the Croatian CPI (Consumer price indices) for May 2022. Looking at the MoM data first, the prices of goods and services for personal consumption, increased by 1.4% on average. On a YoY basis, the CPI increased by 10.8% on average, while on the annual average it grew by 5.4%. The 10.8% YoY growth in the CPI marks one of the largest increases ever recorded in Croatia and continues the trend of increasing inflation that has started in the 2nd half of 2021.
CPI (January 2013 – May 2022, %)
Furthermore, if we were to look at the biggest contributors to this increase on an annual level, it was recorded in the following segments: Transport prices, which grew by 19% YoY, Food and non-alcoholic beverage prices, which increased by 15.2%, Restaurant and hotels, which grew by 12.1%, Furnishings, household equipment, and routine household maintenance, which increased by 11.7%. The story does not get better the further along we go, as the remaining categories all recorded an increase in prices of over 5%, with Housing, water, electricity, gas, and other fuels growing by 9.2%, Clothing and footwear growing by 8.9%, Recreation and culture by 6.6%, and finally, Miscellaneous goods and services by 6.2%.
Even though there has been a steady increase in inflation over the last couple of months, this month’s increase is profound as it recorded growth in inflation across all categories and growth that is not insignificant. The increase in transport and food prices is particularly significant, and even though these were the main drivers of the inflation since it started spiking in late 2021, a 19% and 15.2% increase YoY is considerable. Taking into account the gradual embargo of the Russian oil imports into the EU during 2022, as well as the current war in Ukraine threatening food supply, especially when it comes to wheat, sunflower, and other similar food, if the situation does not resolve itself, it is expected that inflation will only continue growing. Since this is a first month of double digit annual increase in prices, we can say that we expect that this trend should subside towards the year end in order for us to have single digit inflation growth in 2022.
At the same time, the increases across other categories mean that all industries are affected, something that has thus far proven not to be the case, at least not significantly. It should also be noted that the 3rd largest increase recorded, Restaurants and hotels can be attributed to the fact that the pandemic-related measures are completely gone. As May is usually considered „pre-season“ for Croatian tourism, and with high expectations for a good summer season with increased bookings similar to (or higher than) 2019, the growth in this category is also expected.
Taking a look at the largest contributors to the growth rate on the annual basis, Food and non-alcoholic beverages contributed 3.94 p.p., Transport 2.8 p.p., Housing, water, electricity, gas and other fuels 1.55 p.p., Furnishings, household equipment and routine maintenance contributed 0.67 p.p., Restaurants and hotels 0.6 p.p., while Clothing and footwear 0.52 p.p.
At the monthly level, the highest increase was recorded in Transport prices (+3%), followed by Food and non-alcoholic beverages (+2.1%), Furnishings, household equipment and routine household maintenance (+1.5%), Recreation and culture (+1.4%).
CPI change by categories – May 2022 (YoY, %)
Finally, looking at the CPI by selected groups, Goods increased by 13.2% YoY, Services by 4%, Energy by 21.5%, and Food, beverages and tobacco by 12.9%. The total increase without energy was 8.7%, while without energy and food, it was 5.9%.