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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