Drop in inflation surprises analysts

The slowdown in consumer prices in August combined with a slight drop in year-on-year inflation in July has surprised analysts.

“Inflation in August was a bit of a surprise for us, as we expected a slight increase in the price growth of products and services,” said Postova Banka analyst Eva Sadovska for TASR.

Consumer prices dropped 0.1% in August compared to July, while analysts projected a hike of 1.2%. The trend can be put down mainly to the influence of a sharp drop in the prices of housing and energies from 0.7% in July to 0.3% in August, while food prices went up from 3.1% to 3.7%.

VUB bank analyst Martin Lenko expects prices to accelerate to 1.2% year-on-year, saying “A possible hike in the prices of food or energy could contribute to a year-on-year increase in inflation in the next few months”. This opinion was backed by Sadovska who said: “Inflation at the end of 2010 shouldn’t exceed 2%, though. The unemployment rate, which although dropping is still fairly significant, is having an effect on the development of prices in Slovakia”.

Quoted from TASR:

Leave a Reply

Your email address will not be published.