Croatia’s annual industrial producer price inflation slows further to 0.3% y/y in June

Croatia’s annual industrial producer price inflation slows further to 0.3% y/y in June
By bne IntelliNews July 7, 2017

Annual industrial producer price inflation in Croatia slowed down further to 0.3% y/y in June, the lowest level since December, from 1.8% y/y in Maythe statistics institute announced on July 7.

Croatia’s industrial producer prices turned to growth in December and remained in positive territory during the first six months of the year. Annual producer price inflation saw its peak point of 2.9% in April. However, industrial producer prices showed a de-escalation trend during the next two months.

In monthly terms, producer prices in the Adriatic country declined 0.7% in June, after posting a 0.9% decline in May.

​Croatia’s industrial production has been on an upward trend during the last two years, supported by the recovery in both domestic and foreign demand. However, ongoing deflation in the Adriatic country was spurring industrial turnover growth. Croatia started to post high industrial turnover growth after CPI turned to inflation in December. Significant growth in industrial sales came despite a contraction in March's industrial production.

In January-May, working-day adjusted industrial production went up 1.7% y/y. Industrial turnover grew 7.6% y/y in the first four months of 2017

Meanwhile, consumer prices have shown an escalating inflationary trend since December and reached 1.4% y/y in April, although annual CPI inflation declined to 1.1% in May.

The Croatian Central Bank (HNB) forecasts that annual inflation will increase to 1.6% in 2017. In February, the European Commission hiked its average inflation forecast for 2017 to 1.7%, comparing favourably with the -0.9% in the Spring Forecast.

In April, the IMF also revised its 2017 average CPI inflation forecast to 1.1% from 0.8% in October. The fund forecasts CPI inflation will rise to 0.8% at end-2017.

The three–year disinflation period is behind Croatia, and average 2017 CPI inflation might reach 1.9% y/y in 2017, according to Raiffeisen Bank. The Croatian Central Bank (HNB) forecasts that annual inflation will increase to 1.6% in 2017. 

Producer prices of building materials in Croatia rose 1.2% y/y in May, after rising 0.99% y/y in April.

Data

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