Macroeconomic Forecast Croatia

According to the Central Bureau of Statistics, the Croatian consumer price index rose by 1.8% y-o-y in November, up from 1.3% in October and 1.0% in September. The increase in the headline print came chiefly as a result of the transport component of the index, which posted its first month of positive inflation in November in 12 months, increasing by 0.3% (up from -4.8% in October). While food prices continued to fall, utilities increased by 4.1% in November, up from 3.4% in October. As such, we believe that end-2009 inflation will come in at 2.0% once figures are released, and we expect the figure to rise to 2.8% by end-2011.

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