Prices in Slovakia grow again, after three years

Consumer prices in Slovakia have recorded a year-on-year growth again, after three years. Though they have increased only modestly now, the last time they showed an annualised growth was in December 2013.

(Source: Sme)

Year-on-year inflation amounted to minus 0.2 percent in December 2016, with both core and net inflations standing at 0.9 percent, the Slovak Statistics Office (ŠÚ) reported on January 13. In December 2016, month-on-month cumulative inflation was influenced by core inflation by 0.08 percentage points (p.p.), while regulated prices and indirect taxes had no impact, the TASR newswire quoted the ŠÚ. Food prices influenced core inflation by 0.05 p.p. and net inflation influenced core inflation by 0.03 p.p.

Consumer prices increased y-o-y by 0.2 percent in December, rising in the following categories: transport by 2 percent; education and hospitality (hotels, cafes and restaurants) both by 1.9 percent; health care by 1.6 percent; recreation and culture, and miscellaneous goods and services both by 1.4 percent; alcoholic beverages and tobacco by 1.3 percent; postal and telecommunications services by 0.6 percent; and footwear and clothing by 0.2 percent.

Conversely, consumer prices fell y-o-y in food and non-alcoholic beverages by 1.3 percent; in housing, water, electricity, gas and other fuels by 1.2 percent; and in furniture, housing accessories and maintenance by 0.1 percent.

Meanwhile, consumer prices went up by 0.1 percent m-o-m in December.

More general statistics and trends

In 2016, consumer prices dropped by 0.5 percent on average when compared to the same period in 2015. The consumer price index went up by 0.1 percent m-o-m in December for the employed, low-income and pensioner households. In annual terms, the index increased by 0.3 percent for the employed households, while the figure did not change for pensioner and low-income households.

The annual 0.5-percent drop in consumer prices in 2016 represents a mild deepening of deflation following a drop in prices by 0.3 percent in the year in 2015, Slovenská Sporiteľňa analyst Katarína Muchová said on January 13. “The increase in inflation was contributed to by several forces, including a rise in prices in transportation and services,” she said, adding that “not even the annual drop in the prices of foodstuffs and alcohol-free beverages by 1.3 percent was enough to send the overall index into deflation.”

Tatra Banka analyst Juraj Valachy attributed the increase in inflation in December to oil prices having stabilised at higher levels.

“We expect average consumer inflation to be at around 0.7 percent for the whole of 2017,” Muchová noted. “Inflation is gradually drawing closer to the target of the European Central Bank, which is just below 2 percent over the medium term.”

Valachy expects changes in regulated prices of commodities such as natural gas, heating and water will be seen in January. “We expect aggregate consumer inflation to reach 0.5 percent (in January) before gradually going up to 1 percent later in the year,” he summed up.

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