According to the latest release by the Slovenian Statistical Office, the country’s CPI decreased by 0.6% MoM and increased by 3.3% YoY.
The trend of the Slovenian CPI decrease has been present for the last couple of months. This marks the 3rd month in a row that the MoM CPI decreased, this time by 0.6%. Furthermore, the YoY inflation has also been getting more and more under control, and the growth in January amounted to only 3.3%.
Slovenian CPI change (January 2011 – January 2024, YoY, %)
Source: Slovenian Statistical Office, InterCapital Research
As this slowdown continues, the target set by the ECB of 2% inflation is closer and closer to becoming a reality. Other countries in the EU have also recorded a slowdown in inflation growth, albeit the story differs from country to country. In any case, this is supportive of the interest rate cuts by the ECB, which seems more and more likely as we approach summer, as signaled by the ECB President.
Coming back to the Slovenian CPI, on the MoM basis, the price drop was mostly a result of winter sales of clothing and footwear, where an 8.3% decrease was recorded, contributing 0.6 p.p. to the deflation rate. Furthermore, 0.2 p.p. were added by cheaper motor fuels, as petrol prices decreased by 4.7%, and diesel prices by 4.5%.
On the flip side, 5% higher electricity prices contributed 0.2 p.p. to the increase in MoM inflation, an additional 0.1 p.p. was added by higher prices of natural gas, which grew by 7.7%, package domestic holidays, which increased by 4.1%, and meat, prices of which grew by 1.3%.
Moving on to the yearly data, service prices increased by 4.6%, while goods prices grew by 2.7%. In the goods category, non-durable and semi-durable goods increased by 3.9% and 2.1%, respectively, while durable goods prices decreased by 1.3%.
In terms of the impact on the YoY inflation rate, a 0.6 p.p. increase came from higher prices of food and non-alcoholic beverages, which grew by 3.2%. Following this, we have 0.5 p.p. higher prices in the groups housing, water, electricity, gas, and other fuels, with an increase of 3.6%, as well as 9.4% higher prices in the health group.
When compared to other countries in the EU, using the Harmonized Index of Consumer Prices (HICP), Slovenia places in the middle in terms of the YoY HICP, which amounted to 3.4%.
HICP comparison of select European countries (January 2024, YoY, %)
Source: Slovenian Statistical Office, Eurostat, InterCapital Research
On the other hand, with the -0.6% MoM HICP decrease, it places on the lower end as compared to other EU countries.
HICP comparison of select European countries (January 2024, MoM, %)
Source: Slovenian Statistical Office, Eurostat, InterCapital Research
