Croatia: Inflation slows in January from the prior month
Latest reading: Harmonized consumer prices increased 3.6% in annual terms in January, following a 3.8% increase in the prior month. January’s reading was the weakest since October 2024. However, the figure remained higher than both the euro area average and the ECB’s 2.0% target.
Relative to the prior month’s data, there were reduced price pressures for food and non-alcoholic beverages (+2.2% on a year-on-year basis vs +2.9% in December) and restaurants and hotels (+8.3% vs +9.5% in December). In contrast, there were more notable price pressures for transportation (-0.7% vs -1.5% in December) and housing and utilities (+10.5% vs +9.0% in December).
Meanwhile, consumer prices were up 3.4% in January, following a 3.3% rise in the prior month.
Finally, harmonized consumer prices were up 0.10% in January in month-on-month terms, following a 0.34% fall in the prior month.
Outlook: Our panelists see harmonized inflation moderating gradually through end-2026. Average harmonized inflation is seen hitting a five-year low this year but should still remain above the ECB’s 2.0% target and among the highest in the euro area. Potential energy tax cuts pose a downside risk.