Page 46 - SE Outlook Regions 2023

chains, lower imported inflation and the high base from 2022. In 2024,
inflation is seen at 2.5%, while in 2025 it should fall further to 2.3%.

The projection of the central bank is similar for 2022 but the institution
expects that the consumer prices will rise more significantly in 2023 –
by 6.7% – slowing down from an estimated 10.3% in 2022 due to the
gradual fall in global prices of raw materials, resolved supply chain
disruptions and weaker market demand.

The European Commission has projected that the harmonised index of
consumer prices (HICP) inflation would reach 6.5% in 2023, down from
10.1% in 2022. In 2024, negative energy inflation is projected to push
the inflation rate lower towards the euro area average, to 2.3%.

Croatia’s consumer price index (CPI) increased by 13.2% year on year
in October and by 1.3% month on month, according to the latest
available statistics office data. The prices of food and non-alcoholic
beverages (by 5.11%) contributed the most to the increase in the
consumer price indices in October as compared to September.

2.4.4 Industrial production

Croatia’s industry has recovered from the coronavirus pandemic and
the restrictions imposed by the authorities to contain the spread of the
disease. However, in 2022, it started declining as it was affected by
rising input prices since Russia’s invasion of Ukraine. That trend is
expected to continue at least in the first half of 2023.

Industrial production inched down by 0.3% year on year, working-day
adjusted, in October, according to statistics office data. Month on
month, industrial production was down by 1.4%. The y/y fall in industrial
production was caused mainly by the electricity, gas, steam and air
conditioning supply sector, where output decreased by 12.6%. Mining
and quarrying production fell by 3.9%. Manufacturing was the sole
sector to post an increase, by 2% y/y.

Total stocks of industrial finished products in Croatia increased by 3.5%
m/m and 0.5% y/y as of the end of October. The total number of people

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