Inflation at its lowest in a year

In April, inflation in Croatia slipped to 3.3 percent, the lowest level in a year, which is in line with the expectations of macroeconomists.

According to data released today by the Croatian Bureau of Statistics, in April, the prices of goods and services for personal consumption, measured by the consumer price index, were on average 0.4 percent higher compared to March, while they increased by 3.3 percent compared to April of last year.

This represents a slowdown in inflation, considering that a month earlier it was 3.7 percent, and this is the lowest inflation rate since April of last year, when it was 2.6 percent.

The weakening of inflation is in line with expectations. Four macroeconomists who participated in a Hina survey estimated on average that consumer prices rose by 3.3 percent year-on-year in April. Their estimates ranged from 2.9 to 4.0 percent.

Due to the increase in the VAT rate in March of last year, and later the prices of electricity and gas, inflation in the second half of last year was above 4 percent, reaching 5.2 percent in January, the highest level since 2008.

– With the effect of the base period, i.e., relatively low inflation rates until May 2012, inflationary pressures are still partially generated by last year’s increase in administratively set prices of electricity and gas in May, and the rise in food prices, which were influenced by the summer drought and the spillover of negative price movements from international markets. If we exclude energy prices from the consumer price index, the annual growth rate was 2.5 percent, indicating that the impact of the increase in administratively set prices is slowly waning. And if we exclude food along with energy, consumer prices rose by 1.2 percent year-on-year, analysts from Raiffeisenbank Austria noted in their commentary on the DZS report.

In April, compared to the previous month, the prices of goods rose by 0.4, and services by 0.2 percent.

Observed by major groups according to consumption purpose, in April, compared to March, the prices of clothing and footwear rose the most, by 5.0 percent, due to new collections, while the prices of alcoholic beverages and tobacco increased by 1.1 percent.

Prices of food and non-alcoholic beverages, including prices of fresh fruits and vegetables, rose by 0.7 percent, while prices of catering services strengthened by 0.6, and recreation and culture by 0.4 percent.

On the other hand, transport prices, which include fuel prices for personal vehicles, fell by 1.4 percent on a monthly basis.

Prices of furniture, household equipment, and regular maintenance weakened by 0.3 percent, while prices of housing, water, energy, gas, and other fuels slipped by 0.1 percent.

In other segments, prices remained unchanged on a monthly basis.

On an annual basis, however, the prices of housing, water, energy, gas, and other fuels rose the most, by 11.1 percent.

– This was primarily contributed to by the rise in fuel and energy prices by 19.8 percent year-on-year, especially electricity, by 19.8 percent, and gas, by 20.8 percent, whose effect on annual price growth will still be felt in May. On the other hand, prices of liquid fuels are 7 percent lower compared to April 2012, while transport prices recorded a decrease of 3.1 percent during the same period, analysts from Raiffeisenbank Austria noted.

With a growth of 7.5 percent, the prices of alcoholic beverages and tobacco follow, while the prices of food and non-alcoholic beverages rose by 4.9 percent.

Healthcare prices strengthened by 2.7 percent, followed by prices of other goods and services, with a growth of 2.2 percent, and recreation and culture, with a growth of 2.0 percent.

Catering service prices rose in April, compared to the same month last year, by 1.7 percent, while prices of furniture and household equipment rose by 0.6, and education by 0.4 percent.

On the other hand, the prices of clothing and footwear fell the most, by 4.5 percent, on an annual basis.

In the transport segment, which includes fuel prices for personal vehicles, prices weakened by 3.1 percent, while communication prices slipped by 0.1 percent.