Slovakia’s consumer prices inch down 0.1% y/y in June 2014

By bne IntelliNews July 14, 2014

Consumer prices in Slovakia edged down 0.1% on the year in June 2014 after staying flat the month before, statistics office data showed on July 14. On a monthly basis, consumer prices inched up 0.1% from May when they posted a 0.2% monthly increase.

Prices of housing, water, electricity, gas and other fuels, which have the strongest weight in the consumer basket, declined by 0.6% y/y in June, the same as in May and April. Prices of food and non-alcoholic beverages, which have the second strongest weight in the basket, dropped 1.7% y/y in June quickening from a 0.4% y/y drop in May.

On average, consumer prices fell by 0.1 % on the year in the first half of 2014.

The annual core inflation inched up 0.1% in June after increasing 0.2% in May.

IntelliNews comment:  Slovakia’s headline inflation has been easing gradually since November 2011. Yet, we expect increasing domestic demand, which should boost the country’s economic growth this year, will fuel inflation in the second half of the year. Private consumption is expected to grow in Slovakia this year with the European Commission projecting an annual rise of 1.3% in 2014 and the country’s finance ministry seeing an annual increase of 2.4% in household consumption. 

Retail sales, which grew for the seventh month in a row in May, are suggesting household consumption is on the rise. Iindustrial sales also posted an annual growth - of 1.9% in May. In April they slightly fell after seven months of continuous growth.

The central bank’s latest forecast sees the annual CPI inflation at 0.1% in 2014 and at 1.6% in 2015. The International Monetary Fund is expecting Slovakia’s end-year inflation to be 0.7% y/y.

  June-14, m/m change May-14, m/m change June-14, y/y change May-14, y/y change Jan-June-14, y/y change
Consumer prices, total 0.1% 0.2% -0.1% 0.0% -0.1%
Food and non-alcoholic beverages -0.1% 1.1% -1.7% -0.4% -0.2%
Alcoholic beverages and tobacco 0.0% 0.2% 1.6% 2.2% 2.2%
Clothing and footwear 0.9% 0.4% 1.3% 1.1% 0.9%
Housing, water, electricity, gas and other fuels 0.0% 0.0% -0.6% -0.6% -0.8%
Furnishings, household equipment and routine maintenance of the house 0.0% 0.1% -0.8% -0.9% -1.0%
Health 0.1% 0.0% 1.0% 1.0% 1.0%
Transport 0.2% 0.6% -0.2% -0.4% -1.1%
Communication 0.0% -0.8% -1.5% -1.6% -1.5%
Recreation and culture -0.1% 0.0% 0.5% 0.9% 0.7%
Education 0.6% 0.0% 3.4% 4.7% 4.7%
Hotels, cafes and restaurants 0.1% 0.0% 1.2% 1.3% 1.4%
Miscellaneous goods and services 0.5% -0.2% 2.1% -0.9% -1.5%
Source: Statistical Office of the Slovak Republic          

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