In July 2018 consumer prices in Croatia went up 2.1 percent year-on-year, indicating the slowing down of the inflation rate after the record-high 2.4 percent in June, the state statistics bureau reported on Friday.

Nonetheless, this was the second highest year-on-year inflation rate increase this year. The 2.4 percent year-on-year increase in June 2018 was the highest inflation rate on record since April 2013, and it came after marked increases of 1.9 percent in May, and 1.3 percent in April.

In July 2018, the highest year-on-year increase was recorded in transport prices, by 7.2 percent, followed by housing and utilities (3.6 percent), restaurant and hotel prices (2.7 percent) and alcoholic beverages and tobacco (2.4 percent).

Month-on-month, consumer prices fell by 0.9 percent in July 2018, with biggest monthly drops in prices of clothing and footwear, by 14 percent. Prices of food and non-alcoholic beverages fell by 0.5 percent, transport 0.4 percent, education 0.3 percent, and communication services 0.2 percent.

Raiffeisen Bank (RBA) analysts said in their report that the rest of the year will see the influence of rising food prices to ease, especially after the effect of the strong increase in prices of vegetables in early 2017 slowly disappears.

On the annual level, they said that along with an expected increase in electricity prices, inflationary pressures will also come from rising prices of crude oil, which consumers will feel mainly through rising transport prices.

“We expect that some of the inflationary pressures will come from continuous growth of domestic demand as well as growing demand in tourism. Although the average inflation rate should remain low on the annual level, our 1.4 percent projection may still be revised up due to global circumstances,” RBA analysts said.

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