Consumer prices in Croatia fell by 0.1% in August 2020 compared with the same month of 2019, declining for five months in a row, according to data released by the National Bureau of Statistics (DZS) on Wednesday.

Year on year, consumer prices fell by 0.3% in July, 0.2% in June, 0.6% in May and 0.2% in April, which was their first decline on an annual level since the end of 2016.

The annual decline was primarily driven by a 5.2% drop in transport prices, which account for slightly over 15% of the consumer basket. Declines were also observed in the categories of housing, water, electricity, gas and other fuels (-1.7%), education (-0.7%), and recreation and culture (-0.2%).

The largest annual increases were recorded in the categories of alcoholic drinks and tobacco (+4.8%) and miscellaneous goods and services (+2.9%), including services provided by beauty parlours.

Compared with July 2020, consumer prices also fell by 0.1%, while in the year to the end of August consumer prices were 0.3% higher on average than in the same period of 2019 due to inflationary pressures.

Analysts at Raiffeisenbank Austria (RBA) expect a further decline of consumer prices until the end of the year. “With the recovery of the economy in 2021, we expect a return of modest price growth. Core inflation, which does not include prices of agricultural produce, energy or administrative prices, will remain around 1.5%,” they said.