Croatia's consumer prices rose 0.8% y/y in July, slightly accelerating from 0.7% y/y in June, data from the statistics office showed on August 17.
In December, Croatian consumer prices posted the first annual increase, of 0.2%, since June 2015. CPI deflation in Croatia bottomed out with a 1.8% annual decline in May 2016 and consumer prices were on an upward trend until March 2017 thanks to rising oil prices and strengthening private consumption backed by the favourable tourism season in summer 2016.
On a monthly basis, Croatia’s consumer prices declined by 0.7% in July following a 0.7% decline in June. Food and non-alcoholic beverage prices, which have the largest weight in the consumer basket, posted a 0.2% on a monthly hike in July. Prices of housing, water, electricity, gas and other fuels, which have the second largest weight in the consumer basket, inched up 0.1% on the month, while transport charges, with the third largest weight in the basket, posted a decline of 0.9% on a monthly basis.
Clothing prices, which fell 9.8% m/m in July, contributed to the headline monthly CPI deflation with -0.6%, the highest contribution in the month.
The central bank forecasts an annual average CPI inflation of 1.1% in 2017, central bank governor Boris Vujcic said on July 19. In May, the European Commission said it expects Croatia's HICP to reach 1.6% this year. The IMF
In April, the IMF revised up 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 from 0.2% at end-2016.