The changeover to the euro had only minimal impact on inflation in Slovakia. Slovakia’s Finance Ministry’s Financial Policy Institute (IFP) calculated that the changeover contributed to inflation by only 0.18 percentage points, which is in line with the previous analyses of Slovakia’s central bank. The National Bank of Slovakia (NBS) had calculated the impact of the euro changeover on inflation to be between 0.12 and 0.19 percentage points, the SITA newswire wrote.
According to the report by the Financial Policy Institute, there were several attenuating factors in the period of Slovakia’s entry to the eurozone, which eased the impact of the changeover effect to a great extent.
“Inflation in January [2009] was relatively strongly influenced by weakening demand for goods and services in the economy, as well as by the subsequent process of formation of new market prices, or a change of costs. That is why it is not possible to clearly say which part of price changes clearly represented the effect of rounding up or which part of price changes was caused by the economic crisis,” reads the study.
High inflation was the most frequent concern of the public prior to Slovakia’s entry to the eurozone. At present, nine months since Slovakia adopted the euro, the crisis is pushing inflation to historical lows and in September 2009 y-o-y inflation was only 0.6 percent. SITA
Compiled by Jana Liptáková from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.
