Finance Minister Marko Primorac said on Tuesday that he expects the inflation rate to continue to fall, even if he cannot rule out the possibility that tourism will have an impact on price growth in August, as was the case in 2023.

I expect a further slowdown in inflation, Primorac said ahead of the AmCham conference “Sustainable Tax System: Policy, Practice and Prospects”.

He reiterated the ministry’s inflation forecast for 2024 of 3.1% and noted that the ministry will do its best not to contribute to inflation growth with a view to the state budget, but reminded that inflation is primarily combated by monetary policy.

“It would not be logical to subsidise non-residents at the expense of the state budget”

With regard to the inflation increase in August 2023, which interrupted a trend of slowing inflation and brought with it an increase in prices, Primorac said that it is possible that individual prices, especially prices for services, could increase regionally – on the Adriatic coast and in those parts of the country where demand is higher due to tourist arrivals.

When asked about the phasing out of state aid for the business sector and households to cope with energy prices and inflation, he said that the government was slowly phasing it out.

On Monday, for example, the government did not extend its decree to reduce excise duties on diesel and petrol (Eurosuper), which it had issued every fortnight, he said.

“Expecting a large number of tourists and considering the fact that it is a subsidy, it would not be logical to subsidise non-residents at the expense of the state budget,” Primorac said.

“We are slowly abandoning these measures… The data is such that there is gradually no longer any justification for extensive state intervention.”