Slovakia’s industrial producer prices moved lower on annual basis for the fourth straight month in June 2013 but the decline softened a bit to 0.7% from 1% in May, data from the statistics office showed. The producer price deflation recorded in March 2013 was the first since April 2010.

Industrial producer prices on the domestic market decreased by 0.3% y/y in June, the same as in the previous month. The biggest drop was recorded in the manufacturing of coke and refined petroleum products, where prices fell 6.2% y/y following a 9.9% plunge in May. Export producer prices fell 1% y/y, softening from a 1.4% y/y decline in May.

Producer prices are a key preliminary indicator for the dynamics in consumer prices, so the data suggests that consumer inflation would remain muted in the near term. In June, Slovakia’s annual headline inflation hit a two-and-a-half year low of 1.6%.

On a monthly basis, producer prices eased 0.2% in June following a 0.4% fall in May. On the domestic market, prices were 0.2% lower m/m in June after falling 0.6% in the previous month. Export prices fell 0.3% m/m, at the same rate as in May.

The annual growth in agricultural producer prices accelerated slightly to 4.2% in June from to 4.1% the month before, as prices of animal products returned to growth after three consecutive months of declines, offsetting a further easing of the crops price growth, which decelerated for the fourth month in a row.

Prices of construction works rose 1.1% y/y in June, while prices of construction materials and components edged down 0.1% y/y.