Inflation at -0.1 percent in July, experts estimate deflation to continue

Annual inflation stood at -0.1 percent year-on-year in July, with core inflation remaining flat and net inflation reaching 0.5 percent, the Slovak Statistics Office (ŠÚ) reported on August 12.

Annual inflation stood at -0.1 percent year-on-year in July, with core inflation remaining flat and net inflation reaching 0.5 percent, the Slovak Statistics Office (ŠÚ) reported on August 12.

Overall inflation in July was brought down by 0.14 percentage points by core inflation and upped by 0.01 percentage point by regulated prices, while indirect taxes had no effect on overall inflation. Meanwhile, food prices influenced core inflation in a downward direction by 0.11 p.p., and net inflation had a negative effect of 0.03 p.p. on core inflation.

Analysts expect deflation to persist in Slovakia in the coming months following an announcement by the ŠÚ that consumer prices in July went down by 0.1 percent both on an annual and monthly basis, the TASR newswire learnt.

“A mild rise in prices can only be expected to take place towards the end of the year,” ČSOB bank analyst Marek Gábriš told TASR. “The current moderate growth is good news at least short-term for consumers as well as employees due to growth in real salaries.”

Prices of food and beverages have fallen, but according to UniCredit Bank analyst Ľubomír Košňák, the prices of vegetables for one dropped less than is usually the case. While their drop in July over the past 10 years was 9.4 percent, it was only 3.7 percent this July. When it comes to food, risks also lie in Russia’s ban on food imports from the EU, as this could lead to surplus foodstuffs and increasing downward pressure on their prices.

(Source: ŠÚ, TASR)
Compiled by Zuzana Vilikovská from press reports
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