Spectator on facebook

Spectator on facebook

Consumer prices continue to decline

Cheap crude oil and reduced VAT on selected foods are making an impact.

(Source: Sme)

Consumer prices in Slovakia continued to decrease in November, but this decline was milder than in October also due to the vanishing effect of the introduction of free rail transport for selected groups of Slovakia’s population. The year-on-year inflation decreased 0.4 percent in November, compared to the October decrease of 0.6 percent, according to the Slovak Statistics Office.

“The type of deflation that Slovakia has been experiencing over the recent years is not inevitably harmful for the economy,” Ľubomír Koršňák, analyst with UniCredit Bank Czech Republic and Slovakia wrote in his memo. “Contrary to this...moderate deflation increases available funds of households for purchase of common goods and services – along with this their prices have been maintaining a muffled but still mildly positive increase which prevents the forming of a deflation spiral.”

Koršňák recalled that Slovakia most recently reported year-on-year growth of prices in December 2013, i.e. almost two years ago.

The analyst sees especially last year’s lower comparison basis, when the effect of free rail transport has been gradually vanishing, as behind milder decline dynamics. Inflation has been dragged down especially by other factors when regulated prices decreased by 2 percent year on year. The year-on-year decline of motor fuel prices mirroring record low prices of crude oil on world markets continued too.

The development of food prices continues to prevent a faster return to positive inflation in Slovakia. Food prices are expected to decline during the coming months while this development will be supported by reduction of VAT on selected foods, according to Koršňák.

Top stories

In praise of concrete

It was once notorious for its drab tower blocks and urban crime, but Petržalka now epitomises modern Slovakia.

Petržalka is the epitome of communist-era architecture.

Slow down, fashion

Most people are unaware that buying too many clothes too harms the environment.

In shallow waters, experts are expendable

Mihál says that it is Sulík, the man whom his political opponents mocked for having a calculator for a brain, who “is pulling the party out of liberal waters and towards somewhere completely different”.

Richard Sulík is a man of slang.

Blog: Exploring 20th century military sites in Bratislava

It seems to be the fate of military sites and objects in Bratislava that none of them were ever used for the purposes they were built for - cavernas from WWI, bunkers from WWII, nuclear shelters or the anti-aircraft…

One nuclear shelter with a capacity for several hundred people now serves as a music club with suitable name Subclub (formerly U-club).