Consumer prices started growing again

More expensive vegetable, bread and non-alcoholic beverages pushed prices up.

Illustrative stock photoIllustrative stock photo (Source: TASR)

After seven months of a decreasing inflation rate, mild growth was noticed in consumer prices.

The prices of goods and services increased 1.6 percent year-on-year in October 2020, up 0.2 percentage points compared with August and September, when the annual inflation reached 1.4 percent, according to the Statistics Office data.

Still, the October inflation is the second lowest in the recent three years.

“It is still quite a low inflation rate,” Eva Sadovská, analyst of WOOD & Company, wrote in a memo.

Prices in hospitality sector up

Higher prices in restaurants and hotels in particular, as well as in health care, influenced the development despite the coronavirus crisis.

On the other hand, the development of prices in transport and the decrease of prices of alcoholic beverages prevented the further growth of inflation.

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The prices in restaurants and hotels were the biggest to grow in y-o-y comparison, by 4.2 percent. The prices of various goods and service went up 4.1 percent, health care by 3.8 percent, education by 2.9 percent, living, water, electricity, gas and other fuels by 2.5 percent, groceries and non-alcoholic drinks by 1 percent.

Only prices in transport dropped by 4.6 percent, postal services remaining at the same price.

Prices increased by 0.1 percent in monthly terms, especially that of groceries. They rose 0.3 percent m-o-m after a four-month drop. More expensive vegetables, bread and non-alcoholic beverages pushed prices up.

Expected growth

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The acceleration in the inflation rate was expected, according to Ľubomír Koršňák, analyst of the UniCredit Bank Czech Republic and Slovakia.

Sádovská expects that the prices of goods and services will be increasing in the coming months, oscillating between 1 and 2 percent y-o-y. She does not expect deflation.

Also Koršňák expects inflation to account for some 1.5 percent. At the beginning of next year, we will possibly see another drop in the inflation tempo, to 1 percent, he summed up.

Related articleInvestmet Guide: Your key to understanding the Slovak business environment Read more 

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