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Slovakia’s inflation rate in 2011 is highest in three years

In 2011 consumer prices in Slovakia grew at the fastest pace in recent years and energy prices as well as the government's consolidation measures contributed to inflation, the SITA newswire wrote on January 2.

In 2011 consumer prices in Slovakia grew at the fastest pace in recent years and energy prices as well as the government's consolidation measures contributed to inflation, the SITA newswire wrote on January 2.

Bank analysts estimate the inflation rate at 4.5 percent for the end of 2011, which would be the highest growth of consumer prices since 2008. The growth of consumer prices accelerated significantly in early 2011 due to higher energy prices for natural gas, heat and electricity as well as to the government’s fiscal measures aimed at reducing the deficit such as increasing the VAT rate from 19 percent to 20 percent and cancelling various tax exemptions.

An analyst for Slovenská Sporiteľňa bank, Soňa Muzikárová, said that soaring food prices were also behind the growth. In the Q2 2011, the growth of consumer prices reached 4 percent. The second round of energy price increases for households in summer pushed the inflation rate up to 4.5 percent in the third quarter.

Price increases in 2012 should be lower than in 2011, SITA wrote as the higher VAT rate will not increase year-on-year inflation in 2012 and the expected economic slowdown should dampen price increases as well. In spite of rising energy prices, analysts forecast inflation to be at 2.3 percent in 2012, SITA wrote.

Source: SITA

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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