Inflation Falls More Than Initially Estimated, but Prices Related to Tourism Have Increased the Most

Inflation in Croatia continues to weaken, but the largest price jump due to the tourist season is recorded in the category ‘Restaurants and Hotels’, which is the only one showing double-digit growth. Data from the Croatian Bureau of Statistics (DZS) showed that in July, the inflation rate was 2.2 percent higher compared to the same month last year. This is also the lowest inflation rate since June 2021. Compared to the previous month, consumer prices remained unchanged on average.

In this second estimate of price growth, the DZS slightly revised the first estimate of inflation trends for July, published on July 31. At that time, it estimated that the annual inflation rate was 2.3 percent. On the other hand, the monthly rate was confirmed. Observed by major groups, all categories increased on an annual basis except for housing, water, electricity, gas, and other fuels, which fell by 0.6 percent.

The largest price increase was recorded in the category ‘Restaurants and Hotels’, at 9.5 percent. This was followed by education at 5.5 percent, health at 4.9 percent, various goods and services at four percent, recreation and culture, and alcoholic beverages and tobacco at 3.4 percent each, transportation at three percent, and communications at 2.9 percent. Although a good portion of citizens may not agree, food prices increased by only 1.7 percent, according to statistics. The smallest increase was recorded in the category of clothing and footwear at 0.9 percent, and finally, the category of household goods, household equipment, and regular household maintenance at 0.5 percent.

On a monthly basis, the highest average price increases were in the categories of restaurants and hotels, at 3.8 percent. Prices in the communications category were up by 2.9 percent, recreation and culture, and transportation by 2.2 percent each. On the other hand, seasonal discounts are reflected in a decrease in clothing and footwear prices by 12.9 percent.

The DZS also presents data on inflation measured by the Harmonized Index of Consumer Prices (HICP), which is a comparable measure of inflation with European Union countries. According to this data, prices of goods and services for personal consumption in July were on average one percent higher compared to the previous month, while compared to the same period last year, they increased by 3.3 percent. This further reduced the gap between inflation in Croatia measured by this measure and the rest of the eurozone.

Let us recall that total inflation (HICP) across the euro area slightly accelerated last month, from 2.5 percent in June to 2.6 percent in July.