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More euro-adoption inflation concerns

Even though the European Commission has already indicated that rising inflation will not threaten Slovakia's adoption of the euro, the country’s definitive inflation estimate might end up being higher, according to the April 30 edition of the Hospodárske noviny financial daily. According to confidential information close to the European Central Bank, the institution has concerns about price growth in Slovakia. The bank will have the decisive say in evaluation of Slovakia’s preparedness for eurozone entry. According to it, inflation could be pushed up by wage growth. A new factor which could also drive inflation is the elimination of the so-called monetary “pillow”: inflation is currently dampened by a strengthening crown. This will no longer be possible after the euro is introduced.

Even though the European Commission has already indicated that rising inflation will not threaten Slovakia's adoption of the euro, the country’s definitive inflation estimate might end up being higher, according to the April 30 edition of the Hospodárske noviny financial daily. According to confidential information close to the European Central Bank, the institution has concerns about price growth in Slovakia. The bank will have the decisive say in evaluation of Slovakia’s preparedness for eurozone entry. According to it, inflation could be pushed up by wage growth. A new factor which could also drive inflation is the elimination of the so-called monetary “pillow”: inflation is currently dampened by a strengthening crown. This will no longer be possible after the euro is introduced.

Moreover, energy prices could grow faster next year. Growth in energy costs has been tempered by the current government, which could result in significant growth in future years. SITA
b>Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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