According to the latest release by the Slovenian Statistical Office, the country’s CPI increased by 0.2% MoM and increased by 3.6% YoY.
The trend of the Slovenian CPI decreasing, which has been present for the last couple of months has reversed during February, while further YoY inflation continued the growth in March. After three months in a row that the MoM CPI decreased, CPI noted a 0.8% MoM increase during the previous month, followed by a further 0.2% MoM growth in March. Furthermore, the YoY inflation has been, generally, getting more and more under control, while the growth in March amounted to “only” 3.6% (vs. 3.4% in February).
Slovenian CPI change (January 2011 – March 2024, YoY, %)
Source: Slovenian Statistical Office, InterCapital Research
The general trend of the slowdown, which reversed during the previous months, has further continued in March with a higher YoY CPI growth, 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, the general trend 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 (as said, 0.2% increase), the price increase was mostly a result of the prices of clothing and footwear increasing due to the end of discounts and the transition to the spring-summer collection, contributing 0.56 p.p. to the inflation growth rate. Furthermore, 0.2 p.p. growth was added by moto fuel prices, as gasoline prices increased by 4.7%, and diesel prices by 3.8%. Higher prices of water supply and housing-related services both contributed 0.1 p.p. to the overall increase.
Further, besides the aforementioned price increases, there were notable price decreases during March, partially offsetting the aforementioned growth. A 0.5 p.p. decrease in inflation was recorded due to lower prices of holiday packages. However, this category was the main driver of CPI growth in the previous month, so this should not come as a surprise. Further, inflation was further decreased by 0.1 p.p. by the lower prices in solid fuels and other services related to personal vehicles.
Moving on to the yearly data, service prices increased by 6.1%, while goods prices grew by 2.3% overall. In the goods category, semi-durable and daily consumer goods increased by 3.6% and 2.8%, respectively, while durable goods prices decreased by 0.8%.
In terms of the impact on the YoY inflation rate, a 0.6 p.p. increase came both from higher prices in the recreating and culture group and higher prices in the housing, water, electricity, gas and other fuel group. Following theses categories, there was also a 0.5 p.p. contribution from higher prices in services in restaurants and hotels, with an increase of 6.7%, as well as 5.1% higher prices of of various goods and services – contributing 0.4 p.p. to the inflation.
When compared to other countries in the EU, using the latest available data from March 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 2.6%.
