The Slovak inflation rate reached an annual growth of 8.4% in January, driven mainly by rising energy and food prices, according to data published by the Slovak Statistics Office on February 14. Month-on-month inflation stood at its highest level in more than 17 years (July 2004) at 2.7%.

“In monthly and annual terms, prices were driven by the most important items in the consumer basket of Slovak households, namely rising prices of food by more than 8%, housing and energy, and fuels by 12.6%,” the statistics office said. 

Food prices saw a year-on-year growth of 8.1% which is the highest level seen since September 2008. “The most significant contributors to this were rising prices of milk and cheese, bread and cereals, both of which increased by more than 9% y/y,” the office reported. 

Vegetables, oils and fats were also more expensive, with their prices rising by around 25%, up from 18.5% recorded in December last year. 

According to a commentary released by the National Bank of Slovakia (NBS), the Slovak annual growth rate for food prices is expected to amount to 10% in the next few months. "Rising energy and food prices will hit the lowest income groups in particular, due to the 'fixed' nature of these expenditures,” NBS analysts said. 

They also expect the conflict in Ukraine to contribute to a further rise in the prices of cereals and energy commodities. “Cost factors continue to be a source of currently high inflation both in Slovakia and in the EU," they added.

Lubomir Korsnak, an analyst at UniCredit Bank Czech Republic and Slovakia told the Slovak News Agency that after a sharp increase in inflation at the beginning of 2022, no further substantial increases are expected. “Inflation should stabilise at record levels exceeding 8 percent in the coming months and remain there until [the end of] the spring. After that, the effect of last year's increase in excise duties on tobacco and cigarettes [this year's should be about half as high], as well as the high comparative baseline in the prices of goods, imputed rent, fuel and food should gradually contribute to a slowdown in year-on-year price growth dynamics," he was quoted by the news agency as saying. 

Korsnak forecast Slovak inflation to remain above 5% until the end of this year. "The risk for the coming months remains mainly energy prices, which are under strong geopolitical pressure, but increasing global demand and efforts to green energy production are also contributing to the price rises," he added.