Slovakia registered a zero annual headline inflation for the first time in January 2014, statistics office data showed. In December, the annual headline inflation stood at 0.4%. On a monthly basis, consumer prices slightly rose by 0.2% last month, after falling 0.1% in December.
Prices of housing, water, electricity, gas and other fuels, which have the strongest weight in the consumer basket, fell by 0.9% y/y in January after increasing by 0.3% y/y in December. Prices of food and non-alcoholic beverages, which have the second strongest weight in the basket, rose 2.8% m/m in January, boosting the annual rise to 0.9% from 0.2% in December.
January’s annual core inflation was also zero, while in December it stood at 0.4% y/y.
IntelliNews comment: Slovakia’s headline inflation has been falling gradually since November 2011. According to the central bank’s latest forecast, the low food prices and subdued domestic demand will lead to an end-year annual inflation of 0.5% in 2014 from 1.4% last year - a much lower rate compared to 2012 (+3.6%) and 2011 (+3.9%), reflecting the weak demand, the moderate salary growth and cautious consumer spending amid the high unemployment. According to the finance ministry’s think-tank Institute for Financial Policy (IFP), the country is facing a 30% risk of deflation this year with the highest risk seen in the first quarter of 2014.
|Jan-14, m/m change||Dec-13, m/m change||Jan-14, y/y change||Dec-13, y/y change||2013, y/y change|
|Consumer prices, total||0.2%||-0.1%||0.0%||0.4%||1.4%|
|Food and non-alcoholic beverages||2.8%||-0.9%||0.9%||0.2%||3.5%|
|Alcoholic beverages and tobacco||0.7%||0.0%||2.5%||2.4%||3.0%|
|Clothing and footwear||-1.9%||0.0%||0.7%||1.1%||1.0%|
|Housing, water, electricity, gas and other fuels||-0.8%||0.0%||-0.9%||0.3%||0.4%|
|Furnishings, household equipment and routine maintenance of the house||-0.3%||-0.1%||-1.3%||-0.7%||0.2%|
|Recreation and culture||0.2%||-0.1%||0.7%||0.9%||1.8%|
|Hotels, cafes and restaurants||0.1%||0.0%||1.5%||1.6%||2.4%|
|Miscellaneous goods and services||0.2%||0.2%||-1.0%||-0.2%||1.3%|
|Source: Statistical Office of the Slovak Republic|
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