A New Wave of Price Increases is Coming – Media

Citizens can expect a new wave of price increases, with participation for health services set to rise, and residents of Zagreb will face higher parking prices starting in August, which will increase by as much as 100 percent in some zones.

According to Večernji, starting next year, there is also a threat of new increases in electricity and gas prices, and by the end of this year, we could see higher bills for waste collection. Electricity prices could rise in the second half of 2019.

>>>FAO Index: Food Prices Increased in March

Minister of Environment and Energy Tomislav Ćorić guaranteed that electricity prices would not increase in the next 9 to 10 months, but that an increase in fees for renewable energy sources is possible in the second half of 2019, by one or two lipas per kilowatt-hour (kWh). On average, households would need to pay an additional three to six kuna per bill.

Increase in Oil Prices

If there is an increase in oil and gas prices on the global market, which are already at high levels, the price of these energy sources will also rise. In November, a system for separate waste collection is expected to be implemented, which will lead to higher waste collection costs. Ćorić stated that the price of waste collection is based on mixed municipal waste, and if citizens sort their waste themselves, the price increase will not be significant.

Over the past year, milk and dairy products, meat, and eggs have increased in price by an average of between 0.6 and 2 percent, while fruits and vegetables have risen by 5 to 15 percent.

>>>Marić: We are Monitoring Developments Related to Fuel Price Increases

Weather conditions, as well as the disorganization and lack of competitiveness among domestic producers in the last segment, are the main factors influencing supply and demand, and according to some traders, imports are preventing a greater escalation of prices, which is significantly lower than the EU average. In April of this year, compared to April 2017, milk and cheese in the EU increased by 4.8 percent, while in Croatia, it only increased by 0.6, emphasizes the director of Croatiastočara Branko Bobetić. The increase was also influenced by the Law on the Prohibition of Unfair Trading Practices, which caused traders to raise their margins, and part of the costs that fell on producers was passed on to them.

Excessive Competition Among Traders

Due to the excessive number of traders relative to purchasing power, price increases, especially for basic food items, will be just enough for traders to survive, claims Martin Evančić from NTL. Consequently, the growth of food prices in retail will remain at 2 percent this year, influenced by the inflation rate, higher energy and fuel prices, and issues in the largest retail chain, which has caused the usual price and promotional wars to occur at a “lower” level, states private consultant Drago Munjiza.

>>>Eurostat: Annual Inflation in the Eurozone Accelerated to 1.4 Percent in March

Due to the peak tourist season along the coast, prices will be on average 15 percent higher compared to the mainland. Although monetary policy does not pursue a targeted inflation policy, a desirable level of consumer prices is considered to be an increase of around 2 percent, emphasizes Zoran Savić, economic analyst at HGK.

Although inflation in May was 1.9 percent, core inflation was significantly lower at 0.9 percent, indicating that overall consumer prices have risen due to current disruptions in the food and oil markets, and that shocks in these two types of less price-elastic goods will be sporadic and time-limited.