Analysts: High Fuel Prices Key Factor for Inflation in Slovakia in June

(Stock photo by AP)

Bratislava, July 13 (TASR) – The acceleration of inflation in Slovakia in June was chiefly due to an increase in the prices of fuels, translated from the growth of oil prices on the world markets in May, and due to relatively higher prices of non-alcoholic beverages and food, especially fruit, analyst for UniCredit Bank Czech Republic and Slovakia Lubomir Korsnak stated on Friday.

The prices of fuels rose by 1.1 percent month-on-month in June, adding 0.5 percentage points to overall inflation. If it weren’t for the higher fuel prices, inflation in June wouldn’t have accelerated at all compared to the previous month, noted the analyst.

The prices of goods and services in Slovakia rose by 2.8 percent year-on-year in June, according to the Statistics Office.

Slovak Farming Cooperative analyst Eva Sadovska noted that transport prices were the top-growing item on an annual basis in June on 6.5 percent. “Food and non-alcoholic beverages thus weren’t the primary driving force for inflation in Slovakia for a second consecutive month,” said Sadovska.

As for the prices of services, they continued growing y-o-y, from 2.8 percent in May to 2.9 percent in June, being pulled up by dynamically growing salaries, said Korsnak, noting that salary costs represented a significant portion of prices in certain services.

An expected seasonal drop in the prices of food and a likely stabilisation of fuel prices should contribute towards a slight deceleration of inflation in July, while a dynamic growth in salaries and consumption should push demand inflation upward.

Overall y-o-y inflation is expected to be at around 2 percent towards the end of the year, with a key factor in the equation being the high prices of eggs and butter recorded last year.