Consumer price indices (inflation) increased by 3.7% year on year and by 0.1% month on month in April (chart), easing to the lowest this year and down on the 4% y/y registered in March.

“Inflation in the y/y comparison was further affected by higher prices of catering, food and personal care services. The slowdown in inflation was supported by significantly lower prices of fuels and motor vehicles, as well as pharmaceutical products,” the report released by the Statistical Office of the Slovak Republic highlights.  

“The development was favourably affected by lower prices of alcoholic beverages and fuels m/m,” statisticians also noted.  

In the most impactful division of housing and energy, prices grew by 2.5% y/y, while prices in food and non-alcoholic beverages were up by 3.6%. Prices in restaurants and hotels rose by 8.9%, while in miscellaneous goods and services it was +5.9%. The only drop of 1.6% was registered in transportation.

In m/m terms, housing energy prices rose by 0.25%, as did prices in food and non-alcoholic beverages. Prices in restaurants and hotels grew by 0.6%, and prices in transportation fell by 0.3%, with fuel down by 1.4%.

Analysts surveyed by the Slovak press agency TASR expect inflation to accelerate in the upcoming months.

“We expect moderate acceleration of y/y price growth, when the peak could occur in the summer at around 4%,” Marián Kočiš, analyst at Erste’s local branch, Slovenská sporitel’na, was quoted as saying by TASR.

Erste expects inflation to average just below 4% this year. Kočiš also pointed out that while the government’s price caps on energy help lower inflation, spending puts additional pressure on the consolidation strategies of public finances, including the implementation of the transaction tax, which is expected to contribute to the projected acceleration.