Consumer prices in Croatia in June 2018 were up 2.4 percent compared to June 2017, which is the highest year-on-year inflation rate on record since April 2013, the state statistics bureau reported on Tuesday.

In May 2018, the year-on-tear inflation rate was 1.9 percent.

The highest increase was in transport prices, which went up by 6.6 percent. Prices of housing, water, electricity, gas and other fuels rose by 3.6 percent, and those of alcoholic beverages and tobacco products increased by 2.3 percent, while prices of food and non-alcoholic beverages rose by 2.2 percent in the same period.

Compared to May, prices remained largely unchanged.

In their comment on the data released by the statistics bureau, Raiffeisenbank Austria (RBA) analysts said that over the first six months of 2018 compared to the same period in 2017 the inflation rate was 1.4 percent on average. They added that an increase in inflationary pressure was felt more strongly in Q2 2018.

“The year-on-year increase in prices mainly came as a result of rising energy prices, by 3.6 percent, which pushed prices of housing, water, electricity, gas, and all other fuels, as well as transport. This was caused by rise in prices of oil derivatives, due to the rising prices of crude oil in world markets, but also a lower base used for comparison, i.e. the lower electricity prices which were cut early last year,” RBA analysts said.

Prices of food and non-alcoholic beverages also contributed significantly, as they make up 28 percent of the consumer basket, with a 1.3 percent rise.

“In the second half of the year the influence of food price rise on the overall inflation rate in likely to ease, primarily because the effect of increase in vegetable prices in early 2017 is expected to disappear. We expect the main component in inflationary pressures to remain energy prices due to still rising prices of oil imports… Although we expect that the annual inflation rate for the entire 2018 to be around 1.4 percent, the estimate could be revised upwards due to the global environment,” RBA analysts said.

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