Producer Price Index YoY for Croatia: November 2025 Analysis and Outlook
Croatia’s Producer Price Index (PPI) YoY rose 1.30% in November 2025, below the 1.90% estimate and down from 1.70% in October. This signals easing inflationary pressures at the producer level amid mixed macroeconomic signals. Monetary policy remains cautious, while external risks and fiscal constraints shape the outlook. Market reactions were muted but cautious, reflecting uncertainty over inflation persistence and growth prospects.
Table of Contents
The latest Producer Price Index (PPI) YoY for Croatia (HR) registered a 1.30% increase in November 2025, according to the Sigmanomics database. This figure came in below the market consensus estimate of 1.90% and also represents a decline from October’s 1.70% reading. Over the past 12 months, the PPI has fluctuated between -0.50% in May and a peak of 1.70% in October, reflecting volatile input costs amid shifting supply chain dynamics.
Drivers this month
- Energy prices eased, contributing -0.20 percentage points to the slowdown.
- Intermediate goods costs remained stable, adding 0.40 percentage points.
- Durable goods saw a modest uptick, contributing 0.30 percentage points.
- Services input prices were flat, exerting neutral influence.
Policy pulse
The PPI reading remains above zero but below the central bank’s inflation target range of 2%. This suggests moderate inflationary pressure at the wholesale level, allowing the Croatian National Bank to maintain a cautious stance on monetary tightening. The subdued PPI supports a wait-and-see approach amid global uncertainties.
Market lens
Immediate reaction: The Croatian kuna (HRK) depreciated slightly by 0.10% against the euro in the first hour post-release, while 2-year government bond yields edged down by 3 basis points, reflecting mild easing in inflation expectations.
The PPI is a leading indicator of consumer inflation and economic health. Croatia’s 1.30% YoY rise in November contrasts with the 12-month average of approximately 0.90%, indicating a moderate but decelerating inflation trend at the producer level. This follows a volatile pattern in 2025, with negative PPI in May (-0.50%) and a peak in October (1.70%).
Monetary Policy & Financial Conditions
The Croatian National Bank has held its key policy rate steady at 3.25% since September 2025, balancing inflation control with growth support. The lower-than-expected PPI print reduces immediate pressure for rate hikes. Financial conditions remain moderately tight, with credit growth slowing to 4.10% YoY in October.
Fiscal Policy & Government Budget
Fiscal policy remains conservative, with the government targeting a deficit of 2.50% of GDP in 2025. Public investment in infrastructure and energy efficiency programs may moderate producer costs over time. However, limited fiscal space constrains aggressive stimulus, reinforcing reliance on monetary policy to manage inflation.
External Shocks & Geopolitical Risks
Global supply chain disruptions have eased but remain a risk. Energy price volatility, especially in natural gas markets, continues to influence producer costs. Geopolitical tensions in Eastern Europe and the Mediterranean add uncertainty, potentially impacting export demand and input prices.
Drivers this month
- Energy input prices declined by 3.50% MoM, reducing overall PPI growth.
- Intermediate goods prices increased by 0.80% MoM, offsetting some energy declines.
- Durable goods prices rose 0.50% MoM, reflecting steady demand.
Policy pulse
The moderation in PPI growth aligns with the central bank’s inflation target and supports the current neutral monetary policy stance. The data reduces the likelihood of near-term rate hikes but keeps the door open for adjustments if inflation rebounds.
Market lens
Immediate reaction: Croatian government bond yields fell modestly, with the 2-year yield dropping 3 basis points, signaling reduced inflation risk. The HRK weakened slightly against the EUR, reflecting cautious investor sentiment.
This chart highlights a clear trend of easing producer price inflation after a mid-year peak. The downward trajectory suggests inflation pressures are stabilizing, reducing risks of overheating but maintaining moderate upward pressure on consumer prices.
Looking ahead, Croatia’s PPI trajectory will depend on several factors, including energy prices, global supply chain normalization, and domestic demand conditions. The following scenarios outline potential paths:
Bullish scenario (30% probability)
- Energy prices continue to decline, pushing PPI below 1% by Q1 2026.
- Supply chains stabilize, reducing input cost volatility.
- Monetary policy remains accommodative, supporting growth.
Base scenario (50% probability)
- PPI hovers around 1.20%-1.50% through early 2026.
- Moderate inflation pressures persist, consistent with central bank targets.
- Fiscal policy remains neutral, with no major stimulus or tightening.
Bearish scenario (20% probability)
- Energy prices spike due to geopolitical tensions, pushing PPI above 2%.
- Supply chain disruptions re-emerge, increasing input costs.
- Central bank responds with rate hikes, slowing growth.
Structural & Long-Run Trends
Long-term trends suggest gradual convergence of Croatian producer prices with Eurozone averages, driven by EU integration and productivity gains. Investments in green energy and digital infrastructure may reduce volatility and input costs over time, supporting price stability.
The November 2025 PPI YoY reading of 1.30% signals a moderation in inflationary pressures at the producer level in Croatia. While below expectations, it remains consistent with a cautiously optimistic macroeconomic outlook. Monetary policy is likely to remain patient, balancing inflation control with growth support amid external uncertainties. Fiscal discipline and structural reforms will be key to sustaining price stability and economic resilience.
Investors and policymakers should monitor energy markets and geopolitical developments closely, as these remain the primary sources of upside risk. Meanwhile, steady improvements in supply chains and domestic demand conditions could anchor inflation expectations and support a stable economic environment.
Key Markets Likely to React to Producer Price Index YoY
The Producer Price Index YoY is a critical gauge of inflationary trends that influence currency valuations, bond yields, and equity sectors sensitive to input costs. Markets tracking Croatia’s PPI closely include the Croatian kuna currency pair, regional equity indices, and energy-related assets.
- EURHRK: The Croatian kuna’s exchange rate versus the euro often reacts to inflation data, reflecting monetary policy expectations.
- HRZ: Croatia’s benchmark equity index, sensitive to inflation and economic growth signals.
- OMV: An energy sector stock impacted by input cost fluctuations, relevant given energy’s role in PPI.
- BTCUSD: Bitcoin’s price can reflect broader risk sentiment shifts following inflation data.
- USDEUR: Euro currency pairs respond to inflation trends in the Eurozone periphery, including Croatia.
Insight: PPI YoY vs. EURHRK Exchange Rate Since 2020
Since 2020, Croatia’s PPI YoY and the EURHRK exchange rate have shown a moderate correlation. Periods of rising PPI often coincide with HRK depreciation against the euro, reflecting inflation-driven monetary policy expectations. For example, the 2025 mid-year PPI peak at 1.70% corresponded with a 0.40% weakening of HRK. This relationship underscores the importance of inflation data in currency market dynamics.
FAQs
- What is the Producer Price Index YoY for Croatia?
- The Producer Price Index YoY measures the average change in prices received by domestic producers for their output compared to the same month last year. It is a key inflation indicator.
- How does the latest PPI reading impact Croatia’s economy?
- The 1.30% PPI increase suggests moderate inflation pressures, influencing monetary policy decisions and signaling input cost trends that affect consumer prices and business margins.
- Why is the PPI important for investors and policymakers?
- PPI provides early signals of inflation trends, helping investors anticipate interest rate changes and policymakers adjust fiscal and monetary strategies accordingly.
Takeaway: Croatia’s November 2025 PPI YoY reading of 1.30% signals easing inflation pressures, supporting a cautious but stable macroeconomic outlook amid external uncertainties.
Author: Sigmanomics Editorial Team
Updated 11/13/25
Selected Tradable Symbols Correlated to PPI YoY
- EURHRK – Croatian kuna exchange rate sensitive to inflation and monetary policy shifts.
- HRZ – Croatia’s equity index reflecting economic growth and inflation trends.
- OMV – Energy sector stock influenced by input cost fluctuations impacting PPI.
- BTCUSD – Bitcoin price often reacts to inflation and risk sentiment changes.
- USDEUR – Euro currency pair affected by inflation trends in Eurozone periphery.
The November 2025 PPI YoY of 1.30% marks a decline from October’s 1.70% and remains above the 12-month average of 0.90%. This suggests a cooling of inflationary pressures after a summer peak of 1.40% in July and a trough of -0.50% in May.
Energy-related input prices have been the main driver of volatility, with recent easing contributing to the downward momentum. Meanwhile, intermediate and durable goods prices have stabilized, supporting a more balanced inflation profile.