HR: Inflation landed at 4.0% y/y in January

As anticipated, January brought acceleration to the headline figure as CPI reached 4.0% y/y (vs 3.4% y/y in December), thus aligning well with our expectations (EBCe 3.9% y/y). On monthly level prices were up by 0.1%, with available breakdown suggesting that only industrial goods had a deflationary tone (-3.4%), dominantly owning to clothing related sales season effects. Energy prices were up 2.2% m/m, expectedly being driven by the second round of electricity and natural gas price hikes. Food and services added 1.0% and 1.4% m/m respectively, with the former confirming the trend from recent months, while the latter suggest ongoing vivid demand side pressures. Detailed breakdown will be available in mid-January, delivering more concrete insights. Following average FY24 CPI at 3%, recent inflation prints are suggesting 2025 average is likely to land somewhat above that level, implying upward revision of 2.7% inflation forecast for this year. Demand side pressures expectedly remain persistent, with some additional pressures coming from less benevolent food and energy price developments.