February 2, 2023 - The first data on January inflation in Croatia indicate that the introduction of the euro, like in other countries, has not significantly impacted overall inflation, according to the Croatian National Bank (CNB).
"Movements in January suggest that the introduction of the euro in Croatia could have had a relatively mild impact on overall inflation, which is in line with the experience of other countries," the CNB's statement says. It is added that, following the experience of other countries, the increase in prices after the introduction of the euro is probably most apparent in the service industry. For a final assessment of the price increase after the introduction of the euro in Croatia, it is necessary to wait for detailed data for January and the next few months, according to the central bank, as reported by Index.
Prices are almost 13 percent higher than in January 2022
After Croatia's entry into the euro area, Eurostat and the State Statistical Office published today for the first time a rapid estimate of inflation in Croatia. According to these data, in January of this year, compared to January of last year, prices were higher by 12.7 percent on average and compared to December, they remained the same.
On a monthly level, compared to December last year, food, drinks, and tobacco are 1.3 percent more expensive, services were inflated by 1.1 percent, industrial non-food products without energy are estimated to have decreased in price by 2.1 percent, and power by one percent.
"The decrease in prices of raw materials also contributed to the slowdown in inflation."
CNB says that the slight slowdown in inflation in January is in line with their expectations based on the reduction in the prices of oil derivatives and assessments of the slowdown in the annual growth of food prices.
"The decrease in prices of raw materials on the world market, visible since the middle of last year, as well as the gradual elimination of the remaining bottlenecks in the supply chains, contributed to the slowdown of inflation. On the other hand, the significant effects of weakening economic activity are not yet visible," says the CNB.
Bearing in mind indications of easing of inflationary pressures at the global level, as well as statistical elements in terms of the favourable effect of the base period, in the continuation of 2023, they expect a further gradual slowdown of the annual inflation rate, although it will remain elevated for some time.
"However, it should not be ignored that the risks of future inflation outcomes being higher than projected are still considerable," the central bank says.
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