Inflation in June lower than market expectations

THE INFLATION rate in June was below market expectations. Analysts expected consumer
prices in June to grow at a moderately faster rate than the 4.8 percent recorded in May. However, consumer prices grew only by 4.5 percent the Statistics Office reported on Wednesday.

"The main reason for the lower than expected inflation rate was the fact that the increased excise tax on cigarettes has still not been reflected in prices," Slovenská Sporiteľň bank analyst Mária Valachyová told SITA.

ING Bank analyst Eduard Hagara says that from a structural point of view the fact that motor fuel prices decreased by 0.3 percent on a month-on-month basis was not surprising. On the other hand food prices did not grow at as high a rate as in the previous month. The ING analyst points out that the June data did not show any significant demand pressures on inflation. Energy prices contributed about two percentage points to inflation, said Hagara.

He sees the most significant inflation risks in higher oil prices, a weaker crown and the potential looser fiscal policy of the new government.

"We expect inflation could reach 3 percent at the end of 2007, which is significantly higher than the 2-percent target set by the central bank. This could represent a risk in fulfilling Maastricht criteria," he said.

Compiled by Martina Jurinová from press reports

Top stories

The open-air exhibition about the Old Market Hall

Rare historical photos uncover the story of Bratislava's Old Market Hall

Bratislava owes its rich market history to its location on the crossroads of ancient trade routes.


29. júl
The Devil's Viaduct near Tisovec.

From the archive: Little Switzerland awaits exploration

Tisovec, a town in central Slovakia, remains undiscovered at large.


31. júl
Gerulata in Bratislava - Rusovce

Another UNESCO world heritage site in Slovakia dates back to the Roman Empire

The western part of the Danube Limes is now listed on the World Heritage List.


30. júl