Plenković blames the war in Iran for the spike in inflation

According to the initial data from the State Statistics Bureau, inflation in April spiked by 5.8% on an annual basis, and by 1.5% on a monthly basis. Driving the surge in inflation was a 17.5% jump in energy prices.

Commenting on the latest inflation data from the State Statistics Bureau Prime Minister Andrej Plenković opened Thursday's cabinet session by insisting that the massive spike in inflation was the result of the war in Iran and the closure of the Strait of Hormuz: "This increase is a direct consequence of the rise in energy prices, especially oil, due to the war in the Middle East. The rise in energy prices is responsible for almost half of the increase in inflation in April. Had energy prices not changed, inflation would have been around three percent. So here we see the consequences of the external shock and the closure of the Strait of Hormuz, which are present not only in Croatia but in other EU members as well. 16 member states are registering an acceleration in inflation."

Deputy Prime Minister and Finance Minister Tomislav Ćorić had this to say after the cabinet session: "Based on the information I currently have, as of Tuesday, when the new prices take effect, there should actually be relaxation in prices, and here I'm thinking primarily on diesel and Agricultural diesel. However, the current problems are the events of the past couple of days and the impact of the UAE's exit from OPEC Plus."

In response parliament adopted amendments to the Law on Value Added Tax in urgent procedure on Thursday. This will allow government to introduce a so-called floating VAT on petroleum products, enabling it to cut the tax rate from 25 to 15 percent. However, the opposition called out the Plenković government for its failure to rein in inflation. MOST MP Nikola Grmoja: "And what are you offering as some kind of solution - a floating VAT?! You present Plenković's every move as a masterstroke. But, understand that with this kind of inflation and these kinds of salaries and pensions, our people cannot live with dignity."

"Thanks to the HDZ, primarily Prime Minister Plenković, Croatia is among the most vulnerable EU member states to external energy or food shocks. Because you invested in private hotels instead of investing in agricultural production," added Možemo MP Sandra Benčić.

In terms of inflation Croatia continues to rank among the worst Eurozone countries, second only to Bulgaria.

Source: HRT