Consumer prices up by one percent

INFLATION based on the consumer price index continues to decelerate in Slovakia.

INFLATION based on the consumer price index continues to decelerate in Slovakia.

The recent data of the Statistics Office show the growth rate of consumer prices measured by the national methodology reached 1 percent in September, which compared to August meant a slowdown of 0.3 percentage points, the SITA newswire reported.

Prices in Slovakia continue to grow at the slowest pace in three years. On average for the first nine months of this year, prices increased year-on-year by 1.7 percent, which compared to the eight-month average means deceleration of 0.1 percentage points. On a monthly basis, prices stagnated in September, while in August they fell slightly, by 0.2 percent, compared to July.

In an annual comparison, prices rose fastest in education by 5.9 percent. Also prices of alcoholic beverages and tobacco increased by 3.7 percent; food and non-alcoholic beverages by 3.1 percent; prices in hotels, cafes and restaurants by 1.8 percent; recreation and culture by 1.5 percent; health care 0.8 percent; clothing and footwear by 0.7 percent; and prices for housing, water, electricity, gas and other fuels increased by 0.3 percent.

Prices of transport fell by 1.7 percent, postal and telecommunication services by 1 percent and also prices of furniture, household equipment and routine household maintenance fell by 0.1 percent, SITA reported.

Annualised core inflation, which monitors consumer prices excluding administered prices and administrative interventions in the field of taxation, fell to 1 percent in September, down from August's 1.4 percent. Net inflation, which omits food prices, slowed from August's 0.8 percent to 0.4 percent in September.

Analysts from the National Bank of Slovakia (NBS) say they had been expecting inflation to be slightly lower in the upcoming months, with the lowest levels predicted for October and November. The annual growth of consumer prices should gradually accelerate at the beginning of 2014, despite the proclaimed stagnation of gas prices.

"Prices were growing more slowly than expected, and we assume that trend is going to continue. The year-on-year growth of consumer prices is likely to decelerate to below 1 percent by the end of the year," Tatra Banka analyst Boris Fojtik said, as quoted by the TASR newswire.
Recent developments are very favourable from the consumer's perspective. The latest news about price regulation indicates that prices will develop in a similar manner next year, if not even lower than this year.

"One can therefore expect that even a relatively low growth of nominal salaries will be sufficient for real incomes to grow," said Fojtik.

The slow growth in consumer prices is behind the weak consumer demand, according to ČSOB chief analyst Marek Gábriš.

“Weaker price pressures are also due to a small increase in regulated prices from the beginning of the year, as well as due to slower growth of food prices in September," said Gábriš, as quoted by TASR.

Source: TASR, SITA

Compiled by Michaela Terenzani from press reports
The Slovak Spectator cannot vouch for the accuracy of the information
presented in its Flash News postings.

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