The growth of prices in Slovakia is likely to culminate in the summer and in the autumn it could be slowed down. Like this year, developments will depend on the method of consolidation of public finances, the analysts agreed in response to current inflation data published on Friday by the Statistical Office (SO) of the Slovak Republic. Consumer prices were 4.4 %higher in July, which was the highest inflation value in the last 19 months.
“Price development in Slovakia responds to the culmination of the impact of the second wave of government measures this year (new taxes on sweetened drinks, transaction tax effect), in combination with higher seasonal demand in selected leisure activities. Holiday effects will still keep inflation at the current values in August, but we expect prices to decline in autumn”Said the analyst 365.bank Tomáš Boháček.
“Inflation in July is likely to reach its peak this year, and we assume some relaxation in the coming months. The price increase this year is distributed among a wide range of goods and services, also due to one of the key drivers of inflation – increase in value added tax (VAT) introduced within the Consolidation Package”Added the analyst of Slovenská sporiteľňa Matej Horňák.
According to him, prices of goods and services are also reflected by other state measures, such as financial transactions, which pushes up the costs of businesses and is also reflected in the prices for end consumers. On the contrary, economic slowdown, lower consumer confidence or deterioration in the labor market will bring lower household consumption, which presses inflation down.
The analyst assumes that the average inflation rate this year will reach 4 % and next year 3.7 %. According to him, three factors will be crucial. “The first is how the economic situation will also develop and inflationary pressures, or how the ECB responds to these conditions. The second factor is the exact model of the household energy. The third is consolidation, whose form is not yet known, but most likely will also affect the prices in the economy,” said Horňák.
In this context, it will be very important to what the government will emphasize in consolidation, Boháček stressed. “Today we can say that the component of energy costs should not be changed again for most households, but this does not mean that higher living costs in our country will not find the way to households elsewhere. If the scenarios of the higher fiscal consolidation on the income side are filled, Slovakia may be one of the few EU countries where inflation will accelerate again, in 2026,“Explained.
UniCredit Bank analyst Ľubomír Koršňák is more optimistic. It is based on the assumption that the government will not fully transfer market prices per household in 2026. “We do not expect further increasing indirect taxes in our basis of the scenario, which should lead to inflation to 3 %. Any increase in taxes or a significant reduction in energy price subsidies, but can re -increase prices towards 4 %,” he said.
Consumer prices are rising faster than the summer forecast of the National Bank of Slovakia (NBS) expects, the central bank analyst Branislav Karmažin pointed out. “This was mainly due to the constant food inflation, which is largely pulled by drinks. In addition to food, the prices of unregulated services, which after culmination in the previous month still show strong year -on -year growths, ”said he said.
In order to maintain current trends, the average inflation measured by the National CPI should reach 4.1 % this year, ie more than 3.9 % of the summer forecast of the NBS.
