FOOD prices in Slovakia in March stood at the same level as in March 2008. While in each of the first two months of 2009 food prices grew by 1.2 percent year-on-year, they fell by 0.8 percent in March, according to the Statistics Office, the SITA newswire reported.
On a monthly basis, net inflation was -0.2 percent in March compared with a small rise in prices of 0.1 percent in February.
Overall headline inflation in Slovakia is continuing to slow. The year-on-year pace of consumer price growth slowed from 3.1 percent in February to 2.6 percent in March. In January, inflation stood at 3.4 percent.
According to analysts, in particular the high comparative base from last year as well as weakening demand resulting from the economic slowdown is behind this development, SITA reported.
“In the end, the depreciation of regional currencies against the euro makes goods imported to Slovakia cheaper, or creates competitive pressure for local traders,” Slovenská Sporiteľňa analyst Mária Valachyová told SITA.
According to economists, the growth of consumer prices should fall below 2 percent in the second half of this year. In April, a trend similar to that observed in March can be expected.
VÚB Banka analyst Martin Lenko said that the month-on-month decline in food prices, motor fuel prices, and prices in the recreation and culture sector should be partially offset by stagnation or moderate growth for the other main items within the consumer basket.
Analysts expect the index of consumer prices in April to drop 0.1 percent month-on-month, which should result in deceleration of year-on-year growth to 2.3 percent, Lenko told SITA.