March 7 (SeeNews) - The European Central Bank (ECB) said on Tuesday that the impact of the euro changeover on consumer prices in Croatia has so far been relatively small and of the same order of magnitude as that observed following earlier changeovers, despite a more challenging inflationary environment.
“In order to quantify the effect of the euro changeover, we assumed a hypothetical month-on-month growth rate of Harmonised Index of Consumer Prices (HICP) services in January 2023 in line with the average over the period 2013-2022. According to this preliminary exercise, annual headline inflation in Croatia should have been 0.4 percentage point lower than the actual figure,” ECB said in a preliminary research published on its blog.
In a context of higher underlying inflation compared to previous years, this early estimate marks an upper bound for the impact of the euro changeover on prices and is consistent with those from studies on previous euro changeovers.
The HICP for January and February indicate that inflation in Croatia continued its moderating trend in annual terms, decreasing from 12.7% in December to 12.5% in January and 11.7% in February.
Month-on-month inflation was 0.3% in January, which is less than in some other euro area countries. Especially, prices of food and services went up, while the prices of energy and non-energy industrial goods declined compared to December.
In February, the month-on-month growth of Croatian HICP was 0.2%, one of the lowest increases across euro area countries.
Croatia adopted the euro on January 1.