On a YoY basis, the CPI increased by 12.3% on average in August, while the annual average stands at 7.8%. MoM inflation slightly increased by 0.1% with Food and non-alcoholic beverages contributing by 0.44 p.p., while the second most important category – Transport, actually decreased by 4.1% MoM, contributing by 0.60 p.p. to lower inflation, mostly due to lower prices of fuels for personal transport equipment.
The Croatian Bureau of Statistics has published the monthly report on the developments of the Croatian CPI (Consumer price indices) for August 2022. Looking at the MoM data first, the prices of goods and services for personal consumption, increased by 0.1% on average. On a YoY basis, the CPI increased by 12.3% on average, while on the annual average it grew by 7.8%. The 12.3% YoY growth in the CPI marks one of the largest increases ever recorded in Croatia and continues the trend of increasing inflation that started in the 2nd half of 2021. Nevertheless, we note that the MoM increase in CPI started to slacken a bit with just a slight monthly increase.
At the monthly level, the highest contribution to CPI growth was recorded in Food and non-alcoholic beverages (0.44 p.p.), while the second most important category – Transport, actually decreased by 4.1% MoM, contributing by 0.60 p.p. to lower inflation, mostly due to lower prices of fuels for personal transport equipment.
Taking a look at the largest contributors to the growth rate on the annual basis, Food and non-alcoholic beverages contributed 4.98 p.p., Transport 2.08 p.p. and Housing, water, electricity, gas and other fuels 1.77 p.p.
CPI (January 2013 – August 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: Food and non-alcoholic beverages, which increased by 19.2%, followed by Transport, which grew by 14.1%, Housing, water, electricity, gas and other fuels, which increased by 10.5% and Restaurants and hotels, which increased by 17.7% YoY.
We note that the previous month’s increase was profound as it recorded growth in inflation across all categories – leaving us with a high base to compare to. This is the reason why YoY inflation is particularly high, even though the MoM change in CPI is only 0.1%. On an MoM basis, the most important change that contributed to the overall change in the CPI was a change in Transport prices – it actually fell 4.1% on a monthly basis. This is the only category that decreased on a monthly basis. Nevertheless, The decrease in Transport prices was offset by growth in Food and non-alcoholic prices, which increased 1.5% MoM and mostly contributed to a 0.1% MoM growth in inflation.
On a YoY level, the increase in food and transport prices is particularly significant, and even though these were the main drivers of the inflation since it started spiking in late 2021, increasing by as much as 19.2% and 14.1%, respectively. Taking into account the gradual embargo of Russian oil imports into the EU during 2022, as well as the current war in Ukraine threatening food supply. We note this is the second month in row that inflations stands at 12.3% yearly increase and the fourth consequent month of the double-digit annual increase in prices. We can say we expect this trend to 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 2nd largest increase recorded (17.6% YoY), Restaurants and hotels can be attributed to the fact that the pandemic-related measures are completely gone.
CPI change by categories – July 2022 (YoY, %)
Finally, looking at the CPI by selected groups, Goods increased by 14.3% YoY, Services by 6.5%, Energy by 16.8%, and Food, beverages and tobacco by 16.7%. The total increase without energy was 11.3%, while without energy and food, it was 8%.
