Croatian Inflation Expected to Further Decrease

Katarina Anđelković

croatian inflation

November 6, 2023 – The governor of the Croatian National Bank, Boris Vujčić, said that Croatian inflation is expected to further decrease this year and next.

As Glas Slavonije writes, the governor reminded that Croatian inflation reached its maximum in November last year, and since then it has been continuously decreasing, except for August, when it increased slightly due to the rise in oil prices, which was also a consequence of the OPEC decision on the reduction of production.

Vujčić expects that inflation will continue to decrease, both in Croatia and in the eurozone, which is why the Governing Council of the ECB decided at the last session to stop the growth of interest rates in the eurozone, i.e. to keep them at the current level for the first time in a little over a year, after they were successively increased by 4.5 percent. “We expect that we are in sufficiently restrictive territory as far as interest rates are concerned, and that inflation can continue to decrease at this level,” said Vujčić at the CNB’s Open Day.

The Croatian Bureau of Statistics published the first estimate of the consumer price index last week, according to which the Croatian inflation rate in October was 5.8 percent compared to October 2022, which is the lowest inflation rate since last January. Vujčić noted that it is possible that in one of the following months, there will be a slight increase in inflation, perhaps in December, due to the base effect of last December, when energy prices decreased significantly. He pointed out that there are still risks for the realization of the projected inflation trend, at this moment primarily geopolitical ones, but he also said that the ECB is aware of them and ready for them.

“We must be aware that such a risk exists, that there could be another shock on the supply side, perhaps of energy products, if the situation becomes more complicated. However, in our projection, where there is no such shock, we expect a gradual further decline in the inflation rate in the coming months and in next year,” said Vujčić, who is also a member of the Governing Council of the ECB. He reiterated the expectation that Croatian inflation will reach the target rate of around two percent in 2025.

During the Open Day, more than 1,100 citizens visited CNB. Three workshops were held for citizens – on the benefits of savings, the CNB in the Eurosystem, while one where people could learn more about euro banknotes, including how to recognize counterfeits, inspired the greatest interest.


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