Inflation in Slovakia should accelerate slightly in December. This was stated by Ľubomír Koršňák, UniCredit Bank analyst, in a comment on the November consumer price data published by the Statistical Office (ŠÚ) of the Slovak Republic. “We assume that inflation will easily accelerate even in the last month of the year (to 3.3%) and the average inflation this year will be rounded to 2.8%. A fundamental acceleration of inflation awaits Slovak households only in January. Then the announced consolidation package will start to be fully reflected in consumer prices, especially the higher value added tax (VAT),” he specified.
“Already at the beginning of the year, inflation could rise above the level of 5%, in the event that the government does not in any way dampen the announced increase in gas prices. Higher gas prices could increase year-on-year inflation by almost one percentage point. However, depending on the rate of compensation, their contribution to overall inflation is likely to be somewhat lower after all, which could keep overall inflation in January slightly below 5%” Koršňák added.
“We expect that food prices will continue to be influenced mainly by external factors and at the same time the consequences of the consolidation of public finances in the form of higher taxes or levies. On the other hand, growth will be dampened to some extent by the reduced VAT on food, which the government approved in the consolidation measures,” added Marián Kočiš, an analyst at Slovenská sporiteľna.
“For the year 2024, we expect an average year-on-year price growth of 2.8%. Core inflationary pressures caused by low unemployment and strong growth in nominal wages persist,” he underlined. Kočiš added that the average inflation rate in 2025 could stabilize slightly below 5%. “On the other hand, the estimate of inflation for next year may still be influenced by the possible new government regulation of energy prices for households (especially gas),” concluded the analyst of Slovenská sporiteľna.
SÚ SR informed that year-on-year inflation reached 3.2% in November 2024, which was the third highest since the beginning of this year. Consumer prices of goods and services rose by 0.2% in November compared to October.
