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4.4 Inflation & Monetary Policy - Croatia
Croatia’s inflation remained high in 2023 but is expected to return to normal levels in 2024. The EC has projected that HICP inflation will slow down to 2.4% in 2024 from an estimated 8.1% in 2023. Next year, the HICP should slow down growth to 1.6%.
According to the IMF, consumer prices should rise by 4.2% in 2024 from an estimated 8.6% in 2023. The World Bank has a slightly more positive projection for the CPI, expecting it will rise by 3.9% in 2024 and slow down growth to 2.3% in 2025.
The government expects that the annual inflation will reach 3.1% in 2024 and will slow down to 2.7% in 2025 mainly thanks to private consumption and investment, while the central bank has set it at 2.5% in 2024. In September, it approved a fresh package of measures aimed at tackling the high inflation.
The main goals of the latest package, worth €464mn, were to keep energy prices low and protect consumers against inflation. The government froze the price of electricity for households, the business sector and public institutions for six months from October 1 2023. The government has secured €288mn for this measure. Part of the money will be provided as direct aid to households.
The prices of 30 products were also limited as of September 18.
Croatia’s CPI increased by 4.7% year on year in November and dropped by 0.1% month on month, according to the latest available statistics office data. The prices of clothes and shoes (by 1.4%) contributed the most to the increase in the consumer price indices in November as compared to October.
At the same time, Croatia's average producer prices for agricultural goods surged by 34.8% compared to 2015 in the third quarter of 2023
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