Annual industrial producer price inflation in Croatia slowed down from 2.9% y/y in April to 1.8% y/y in May, the statistics institute announced on June 9.
Croatia’s industrial producer prices turned to growth in December and remained in positive territory during the first five months of the year. Consumer prices have also shown an escalating inflationary trend since December and reached 1.4% y/y in April.
In monthly terms, producer prices in the Adriatic country also declined 0.9% in May, after posting a 0.4% rise in April.
Despite the improving trend in 2017, industrial producer prices inflation in Croatia remains behind the EU average, which increased to 4.8% y/y in April from 4.6% a month ago.
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.
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.