September the 20th, 2020 – The coronavirus pandemic might have thrown a spanner in the global and domestic economy’s works, but there has still been a certain level of inflation in Croatia this summer. Consumer prices in August fell slightly, by 0.1 percent, both compared to the previous month and compared to August last year.
As Novac/Marina Klepo writes on the 19th of September, 2020, this marks the fifth month of deflation on an annual basis in Croatia and it began in April after the economy was all but shut down during the month of lockdown in Croatia.
Thanks to seasonal discounts, the largest monthly drop in prices in August was recorded by the clothing and footwear sector – by 3.6 percent. At the annual level, on the other hand, price movements are still mostly influenced by liquid fuels, which were almost 30 percent cheaper than they were one year ago.
As the coronavirus crisis has had and continues to have a significant impact on the demand for various products, it did the same to their prices. Apart from energy, transport prices have fallen the most in the past year, by 5.2 percent, and this is a category that makes up 15 percent of the consumer basket. At the same time, some services and products have become significantly cheaper, while others have become more expensive. Airline tickets, for example, are 19 percent cheaper, and bicycle prices are up by 8.5 percent.
On the other hand, the inflation in Croatia has been in regard to food prices which have risen by an average of 1.2 percent, but some products have risen much more than that – fruit is 7.8 percent more expensive than it was a year ago, and meat prices have risen by 3.9 percent, while the price of bread and cereals is one percent higher than it was in 2019.
That being said, despite the inflation in Croatia when it comes to certain food products, vegetables are 4.9 percent cheaper than they were back in 2019, and oil and fat prices have fallen by 3.6 percent. Alcoholic beverages and tobacco significantly contributed to the “mitigation” of the fall in consumer prices on an annual basis, with a price increase of 5.2 percent, which is associated with an increase in excise duties on such products.
By the end of this year, RBA analysts expect a decline in average annual consumer price rates, and the year-on-year inflation rate should stagnate.
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