Growth of prices in Slovakia resumes after three years

Inflation is fuelled by growing food and service prices.

(Source: Sme)

The growth of prices in Slovakia resumed after a three-year break last year. They increased by 1.3 percent on average when the last time Slovakia recorded a y-o-y growth of prices was in 2013. That year they increased by 1.4 percent. Then followed a decline of 0.1 percent for the whole of 2014 and another 0.3 percent drop in 2015, and the historic highest price decrease in Slovakia was recorded in 2016 when prices fell by 0.5 percent y-o-y. The Statistics Office reported the data on January 15.

Analyst with Slovenská Sporiteľňa Katarína Muchová ascribes the increase in prices in 2017 especially to the prices of food and services.

In the case of food prices, the effect of reduced VAT on selected food vanished and thus food prices reflect better the development of food commodities on world markets. The increase in prices for services mirrors the improving situation on the labour market and the higher disposable income of households.

“We expect that average inflation will reach 2 percent this year, even though this will not be without oscillations,” said Muchová as cited by the TASR newswire.

In December 2017, consumer prices grew 1.9 percent y/y. Inflation was propelled by the increasing price of food and non-alcoholic beverages (6.4 percent), miscellaneous products and services (2.5 percent) and hotels and restaurants (2.4 percent). Conversely, the prices of housing, water, electricity, gas and other fuels went down by 0.8 percent, while those of postal and telecommunications services remained unchanged in December.

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