FinMin reduces prognosed inflation in 2011 to 3.3 percent

The Finance Ministry's Financial Policy Institute (IFP) on Tuesday, December 21, announced that it reduced the figure of the prognosed inflation in 2011 from 3.7 percent to 3.3 percent. The main reason for the reduction is the recent decision made by the Regulatory Office for Network Industries (ÚRSO) on the prices of energy for households, the shipwreck of the planned hike in the excise tax on beer in Parliament and further developments, said the IFP.


The Finance Ministry's Financial Policy Institute (IFP) on Tuesday, December 21, announced that it reduced the figure of the prognosed inflation in 2011 from 3.7 percent to 3.3 percent. The main reason for the reduction is the recent decision made by the Regulatory Office for Network Industries (ÚRSO) on the prices of energy for households, the shipwreck of the planned hike in the excise tax on beer in Parliament and further developments, said the IFP.

ÚRSO earlier this month decided that the average price of gas for households will rise by 4.47 percent as of January 1,; with the price of electricity for households set to increase by 4.82 percent. Both price hikes are far lower than IFP expected when drawing up the previous inflation prognosis in September.

The prices next year will also be influenced by the VAT increase from 19 percent to 20 percent as of January 1, the TASR newswire wrote.

In absolute figures, the rise in prices should affect the wealthiest households; while in percentage terms, the hikes will hurt poorer households the most. This is due to the rapid rise in the prices of food, which make up most of the expenditures with regards to poor households of the poor, according to IFP.

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