Deflation Slows Down in September

Total Croatia News

Consumer prices in September decreased by 0.9 percent year-on-year.

In September, consumer prices in Croatia fell by 0.9 percent year-on-year, while in August they decreased by 1.5 percent. Although deflation has slowed down, the data still point to a continuation of deflationary pressures, reports on October 14, 2016.

The Central Bureau of Statistics announced on Friday data which indicate the continuation of deflationary pressures for the third year in a row. “Although at a somewhat slower pace, September confirmed the trend of negative annual inflation rates which has lasted since February 2014, with sporadic interruptions”, say analysts of Raiffeisenbank Austria (RBA).

In September, year-on-year price decreases were recorded in the sectors of communications (3.6 percent), followed by water, electricity and gas (3.3 percent), transportation (2.1 percent), and recreation and cultural activities (1.2 percent). On the other hand, the largest increase in prices year-on-year was recorded in the sectors of clothing and footwear (1.7 percent), followed health services, and restaurant and hotel services.

In the first nine months of this year, consumer prices were on average 1.4 percent lower than in the same period last year. The period of deflation has entered its third year, given that in 2015 consumer prices on average fell by 0.5 percent and in 2014 by 0.2 percent.

“The annual decline in consumer prices has been further boosted by the administrative reduction in gas prices at the beginning of the second quarter”, say the RBA analysts.

It is expected that negative annual rates of inflation will continue until the end of the year, mainly due to developments with energy prices on world commodity markets. At the level of the whole year, the average level of deflation will be higher than in the previous two years. “However, for the next year, we anticipate the return of the average annual inflation rate to the positive territory”, conclude the RBA analysts.


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