Croatia: Inflation ebbs in December from prior month
Latest reading: Harmonized consumer prices rose 3.8% in annual terms in December, following a 4.3% increase in the prior month. December’s reading was the weakest since October 2024. The figure remains higher than the euro area and above the ECB’s 2.0% target. Over 2025 as a whole, harmonized inflation averaged 4.4% (2024: 4.0%), marking the second-highest rate in the euro area.
Relative to the previous month’s data, in December there were reduced price pressures for food and non-alcoholic beverages (+2.9% in annual terms vs +4.1% in November), transportation (-1.5% vs +0.1% in November), housing and utilities (+9.1% vs +9.7% in November) and recreation (+3.2% vs +3.8% in November). In contrast, price pressures were higher for restaurants and hotels in December (+9.5% vs +8.7% in November).
Meanwhile, consumer prices were up 3.2% in December, following a 3.8% increase in the prior month.
Lastly, harmonized consumer prices fell 0.34% in December on a month-on-month basis, following a 0.27% rise in the prior month.
Outlook: Our panelists see harmonized inflation moderating gradually from Q4 through end-2026. Average harmonized inflation is expected to decrease to a five-year low this year but remain above the ECB’s 2.0% target and the euro area average. The Consensus indicates that it will continue to decline in 2027.