September’s recorded price decrease of 0.1 percent in Slovakia wasn't too high, but it needs to be noted that negative inflation has been recurring throughout 2014, according to Home Credit analyst Michal Kozub.
“The best result has been achieved in January and May, when prices stayed flat year-on-year”, he said. The most significant price reduction was to be seen in foodstuffs and non-alcoholic beverages - down 1.6 percent in September. “This means that after a long period with the prices of food being a key source of inflation, the current situation is being perceived by consumers as a relief, as they are able to afford more from their salaries”, said Kozub. The prices of alcoholic beverages and tobacco have been rising - this time by 0.9 percent year on year, while clothing and footwear became more expensive by 1.5 percent in September. “Prices in Slovakia are relatively stable overall at the moment, so deflation or zero inflation will most probably continue”, said Kozub.
According to UniCredit Bank analyst Ľubomír Koršňák, prices in Slovakia have been pushed down by the prices of fuels, which have been reacting to a continuous fall in oil prices on the global markets, while a weaker euro mitigated the effects only slightly. “Due to a lower base of comparison from last year, we expect that yearly inflation may stagnate in October, and slight inflation may be seen in the last quarter of this year”, said Koršňák. “The reduction of gas prices for households for next year as announced by Prime Minister Robert Fico should contribute towards the fact that no significant acceleration of inflation will be seen in 2015 either. Lower price growth should continue to make the growth of real salaries more significant, and thereby stimulate household consumption”, concluded the analyst.
