INSTANT VIEW 2-Slovak Feb EU-norm CPI slightly below fcast

    BRATISLAVA, March 15 (Reuters) - Slovak consumer prices rose 
0.1 percent month-on-month in February, according to EU-norm 
methodology, putting the annual inflation rate at 2.0 percent, 
data from the Statistics Office showed on Thursday. 
     
KEY POINTS: 
SLOVAK EU-NORM INFLATION    FEB 07    market forecast 
  pct change mo/mo           +0.1        +0.2 
  pct change yr/yr           +2.0        +2.1 
   
  (Details of Feb inflation data ............. [ID:nPRG000268]) 
 
- Food and non-alcoholic beverages, which have a strong 
weighting in the consumer price basket, rise by 0.5 percent 
month-on-month, after a 2.2 percent rise in January. 
- Housing, water, electricity, gas and other fuels, which 
pushed inflation up last year, rise by 0.2 percent on the month 
in January, compared with a 0.2 percent drop in January. 
- Annual price growth in the housing category, which has the 
strongest weighting in the basket, is 2.7 percent, after 3.1 
percent rise in January. 
- Transportation prices fall by 0.5 percent month-on-month, 
after a 0.3 percent drop in January. 
  
COMMENTARY: 
    JURAJ VALACHY, ANALYST, TATRA BANKA, BRATISLAVA 
    "The data are encouraging for the crown. A favourable 
inflation outlook also gives the central bank room to lower 
interest rates. 
    "We have expected a 25 basis point rate cut in the second 
quarter, and we still maintain that. If the central bank does 
not want to tolerate a stronger crown, it will have to cut 
interest rates in the second quarter." 
     
BACKGROUND: 
- The central bank follows inflation calculated by the 
EU methodology as a part of Slovakia's plan to adopt the euro in 
2009. 
- Prices under the local methodology rose by 0.2 percent on the 
month in February, putting the annual rate at 2.7 percent. 
- Slovakia wants to meet all criteria for euro adoption in 2008. 
The central bank predicts EU-norm inflation rate to fall to 1.5 
percent at the end of 2007. 
- The central bank left the key two-week repo rate unchanged at 
4.75 percent for the fifth month in a row in February. Analysts 
expect the central bank to ease monetary policy this year. 
     
LINKS: 
- For further details on February inflation and other past data, 
Reuters 3000 Xtra users can click on the Slovak Statistics 
Office's website: 
    http://wwww.statistics.sk/webdata/english/index2_a.htm 
     
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