Higher prices of building materials impacted the June inflation

The inflation rate has been the highest since February 2020.

Illustrative stock photoIllustrative stock photo (Source: Sme)

Year-on-year price growth accelerated in June to 2.9 percent from 2.2 percent in May. This is the highest level since February 2020, according to the Statistics Office.

Increased housing prices, the prices of construction materials, and growing food prices contributed to the increase, the SITA newswire reported.

After five months, when foodstuffs were cheaper year-on-year, their prices contributed substantially to inflation in June. The prices of food and non-alcoholic beverages posted a year-on-year growth of 1.4 percent for the first time this year.

Prices will continue to grow

Analysts expect that the prices of goods and services will continue to grow in the upcoming months.

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"We expect that inflation will report similar y-o-y dynamics in the next months,” an analyst with 365.bank, Jana Glasová, commented. “It will be pushed upwards mainly by the higher prices of gasoline, agricultural commodities, and food, as well as by higher housing prices.”

Inflation stood at 0.7 percent in January, exceeded 2 percent in May, and got close to 3 percent in June.

"So far, we've projected inflation for the whole of 2021 at 1.8 percent, but we'll revise this estimate upwards in the upcoming weeks, closer to 2 percent," stated Eva Sadovská, an analyst with Wood & Company.

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