Consumer price indices (inflation) in Slovakia increased by 4.1% year on year in May (chart), the highest value since December, and returned to an accelerating trajectory after easing in April to 3.7% y/y.

“On y/y basis, prices increased in all 12 divisions, mainly due to the higher prices of food, non-alcoholic beverages, but also gardening supplies and flowers, and package holidays,” the Statistical Office of the Slovak Republic highlighted in its report.

Month on month, inflation rose by 0.5% as “the price increase was most affected by more expensive food and non-alcoholic beverages, as well as alcoholic beverages. The dampening effect was mainly due to the lower fuel prices in transportation,” the country’s statisticians noted.  

Prices in housing and energy rose by 2.8% y/y, followed by food and non-alcoholic beverages (3.9%), restaurants and hotels (8.8%), miscellaneous goods and services (6.5%) and education (10.2%).

In m/m terms, food and non-alcoholic beverages were up by 1.3%, and alcoholic beverages and tobacco by 1.5%. Housing and energy prices increased by 0.1%, while prices in transportation fell by 1.2%. Prices in miscellaneous goods and services rose by 0.5%, and restaurants and hotels by 0.4%.

The figures come yet as another disappointment after the Slovak economy slowed down to 0.9% in the first quarter in what is the first slowdown below 1% in two years, while it is also down from the 1.7% growth in the 4Q of last year.

Inflation spiked early this year after the cabinet of populist Prime Minister Robert Fico began implementing measures, including tax hikes, aimed at consolidating public finances in what appears to be an increasingly challenging task for the populist cabinet.

Fico and his ministers are mulling more consolidation measures, but these encounter internal rows, including continued disagreements over the transaction tax imposing levy on payment transactions and implemented in April.

Local analysts warn that Slovakia is also at the bottom of investments in the public and private sectors from the V4 group of four Central European countries, and speculations in Bratislava abound that Fico may give up on the uphill consolidation task and opt for early elections this or next year before the current parliamentary term expires in 2027 and before the state budget for 2027 will have to be passed.