Inflation fell to an all time low in September

DEFLATION continued in Slovakia in September. Overall inflation stood at -0.5 percent year-on-year in September 2015.

Illustrative stock photoIllustrative stock photo (Source: SITA)

The consumer prices fell by 0.5 percent compared to the previous year and reached an all time low.  Analysts say that the main reason was the fall in value of accommodation, the Sme daily reported.

The consumer prices fell y-o-y in transport by 7.3 percent; housing, water, electricity, gas and other fuels by 1.7 percent; and postal and telecommunication services by 0.2 percent. To the contrary, furnishings, household equipment and routine maintenance of the house, hotels, cafés and restaurants increased by 1.8 percent; education by 1.4 percent; alcoholic beverages, tobacco, recreation and culture, and various goods and services by 1 percent; health by 0.9 percent; clothing and footwear by 0.5 percent; and food and non-alcoholic beverages by 0.3 percent, the Statistics Office informed.

In monthly terms, consumer prices fell by 0.3 percent, which is the lowest in nearly nine years, Tatra Banka analyst Boris Fojtík wrote in a memo.

Consumer prices dropped in transport by 1.3 percent; housing, water, electricity, gas and other fuels by 0.8 percent; and alcoholic beverages and tobacco by 0.1 percent. On the other hand, the price of education increased by 0.8 percent; of hotels, cafés and restaurants by 0.3 percent; of clothing and footwear by 0.2 percent; and furnishings, household equipment and routine maintenance of house by 0.1 percent. The price of food and non-alcoholic beverages, health, postal and telecommunication services, recreation and culture, and various goods and services remained unchanged.

During the first nine months of 2015, consumer prices dropped by 0.3 percent compared to the same period of 2014, according to the Statistics Office.

The September records were affected mostly by the drop in oil prices, which impacted gas prices which fell by 3.8 percent in September, as well as the lower cost of fuels which were 4.3 percent lower than in August, said Fojtík.

Analysts expect that by the end of the year, inflation will either oscillate around zero or will slightly increase.

“In the end of the year the effect of free rail travel and the steep drop in oil prices at the turn of the year will start fading out,” Ľubomír Koršňák, analyst with UniCredit Bank Czech Republic and Slovakia, wrote in a memo.

He doesn't expect that inflation will grow rapidly next year. It will stay at about 1 percent, he added.

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