According to the latest release by the Slovenian Statistical Office, the country’s CPI increased by 0.8% MoM and increased by 3.4% YoY.

The trend of the Slovenian CPI decreasing, which has been present for the last couple of months ha reversed during February. After three months in a row that the MoM CPI decreased, CPI noted a 0.8% MoM increase during February. Furthermore, the YoY inflation has been, generally, getting more and more under control, while the growth in February amounted to only 3.4% (vs. 3.3% in January).

Slovenian CPI change (January 2011 – February 2024, YoY, %)

Source: Slovenian Statistical Office, InterCapital Research

The general trend of the slowdown did not extend during February, getting slightly further away from the target set by the ECB of 2% inflation. However, we note that we expect to soon reach a 2% expectation. Other countries in the EU have also recorded a slight growth in inflation, albeit the story differs from country to country. In any case, general trend is supportive of the interest rate cuts by the ECB, which seems more and more likely as we approach summer, as signalled by the ECB President.

Coming back to the Slovenian CPI, on the MoM basis, the price increase was mostly a result of package international holidays, which became 22.2% more expensive, contributing 0.4 p.p. to the inflation growth rate. Furthermore, 0.1 p.p. growth was added by petroleum products, as petrol prices decreased by 2%, and diesel prices by 2.5%.

Further, besides the aforementioned price increases, there were no notable price decreases in February.

Moving on to the yearly data, service prices increased by 5.1%, while goods prices grew by 2.6%. In the goods category, non-durable and semi-durable goods increased by 3.6% and 3.2%, respectively, while durable goods prices decreased by 1.8%.

In terms of the impact on the YoY inflation rate, a 0.6 p.p. increase came from higher prices in the health group, which grew by 10.9%. Following this category, we also have a 0.6 p.p. contribution from higher prices in the groups housing, water, electricity, gas, and other fuels, with an increase of 4.7%, as well as 6% higher prices of services by restaurants and hotels – contributing 0.4 p.p. to the inflation.

When compared to other countries in the EU, using the latest available data from January 2024 for the Harmonized Index of Consumer Prices (HICP), Slovenia places in the middle in terms of the YoY HICP, which amounted to 3.4%, while in the euro area inflation amounted to 2.8%.