Annual industrial producer prices inflation in Croatia accelerated to 2.9% y/y in April from 1.1% y/y in the previous month, Eurostat reported on June 2.
Croatia’s industrial producer prices turned to growth in December and continued to show an escalating growth trend during the first four 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 increased 0.4% in April, after posting a 0.4% decline in March.
Despite the escalating trend, industrial producer prices inflation in Croatia remains behind the EU average which also escalated to 4.8% y/y in April from 4.6% a month ago, according to data from Eurostat.
The three–year disinflation period in Croatia is behind 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.
In December, Croatian consumer prices posted the first annual increase since June 2015. Consumer Price Index (CPI) deflation in Croatia bottomed out with a 1.8% annual decline in May and has been on an upward trend in the last eight months thanks to rising oil prices and strengthening private consumption backed by the favourable tourism season in summer 2016.
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.