Inflation in Slovakia reached single digits in July for the first time in 16 months. This was helped by the abolition of radio and television licence fees, says UniCredit Bank analyst Lubomir Korsnak. According to the analyst, inflation has already peaked and will continue to slow in the coming months. "The moderation in (year-on-year) inflation will be supported by a strong base effect, i.e. last year's high level, but weakening domestic consumer demand will also play its part. Conversely, rising wages could continue to act as a brake on inflationary easing," the analyst says.
Experts do not expect market energy prices to be fully reflected in gas, heating and electricity prices for Slovak households next year. The state will again partially dampen the price growth of these items.
Higher meat or oil costs have prevented a significant fall in food prices. Lubomir Korsnak points out that prices of services have also risen. Companies have been reflecting their own higher costs in prices for a longer period of time: "We have also seen changes in transport services, where we have seen a gradual increase in prices due to higher fuel or electricity costs."
Companies are also reflecting higher prices in higher salary increases for their employees. Lubomir Korsnak continues: "These make up a fairly significant part of the final price of some services. For example, hairdressers, restaurants and hotels".
Despite the fact that inflation has fallen to 10 per cent, Slovakia had the highest inflation rate in the eurozone, according to preliminary data from Eurostat.
Source: TASR, RTVS
