Slovakia registers zero annual headline inflation in January 2014

By bne IntelliNews February 13, 2014

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%
Health 0.2% -0.1% 1.0% 0.5% 2.0%
Transport 0.1% 0.1% -1.3% -1.2% -1.1%
Communication 0.0% 0.0% -1.4% -1.0% 0.2%
Recreation and culture 0.2% -0.1% 0.7% 0.9% 1.8%
Education 0.0% 0.0% 5.4% 5.7% 6.5%
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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