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UPDATE 1 - Croatia's June annual inflation slows below analyst expectations

Author Iskra Pavlova
UPDATE 1 - Croatia's June annual inflation slows below analyst expectations Inflation. Author: License All Rights Reserved

ZAGREB (Croatia), July 16 (SeeNews) - Croatia's consumer price inflation slowed to 0.6% year-on-year in June from 0.9% in May - below the expectations of Austria's Erste banking group, Erste said on Tuesday. 

"June inflation landed few notches below our expectations, as headline figure recorded 0.6% y/y [versus Erste's 0.8% y/y projection]," bank analysts said in an instant comment after the country's statistical office published the inflation data earlier on Tuesday.

On a monthly comparison basis, Croatia's consumer price index (CPI) decreased by 0.3% in June, after growing 0.6% in May.

Erste noted that the most pronounced downside pressures came from lower prices of clothing and footwear amid the start of the summer sales season. In addition, lower transport prices also added to the monthly decrease.

"We see similar inflation pattern going forward – demand-side pressures should accelerate only marginally, reflecting a strong consumption profile, while the supply side remains mostly sensitive to energy prices, which for the time being look quite comfortable," Erste said.

The banking group added it anticipates average inflation of around 1% in 2019.

Croatia's average annual inflation accelerated to 1.5% last year, from 1.1% in 2017.

The statistical office said that prices of food and non-alcoholic beverages, which have the largest weight of 27.81% in the consumer basket, fell 0.3% year-on-year last month, after dropping 0.7% in May. Prices of housing, water, electricity, gas, and other fuels, with a 16.44% weight, added 3.9% in June after rising 4.1% in May. Prices of transport services, which have a 12.43% weight, decreased by 1.4% in June, following growth of 1.7% in the previous month.