INSTANT VIEW 3-Slovak June CPI touch above forecasts

...percent, the Slovak Statistics Office said on 
Thursday. 
 
  KEY POINTS: 
  SLOVAK HEADLINE CPI     JUNE 07    JUNE 07 FCASTS 
  pct change mo/mo       +0.3          +0.2 
  pct change yr/yr       +2.5          +2.4 
     
(for full table pls click ............ [nPRG000415]) 
     
- June core inflation rate, which excludes the impact of changes 
to state-regulated prices and excise taxes, was 0.4 percent 
month-on-month, double the forecast 0.2 percent. 
- Housing, water, electricity, gas and other fuels rise by 0.7 
percent in June, after a 0.1 percent growth in May. 
- Prices of food and non-alcoholic beverages drop 0.1 percent on 
the month in June after a 0.5 percent rise in May. 
- Transportation prices, influenced mainly by oil costs, rise 
0.4 percent on the month in June, after a 0.3 percent growth in 
May. 
     
    ANALYST COMMENTS: 
    MARIA VALACHYOVA, SENIOR ANALYST, SLOVENSKA SPORITELNA 
    "Inflation is a touch above expectations, the key surprising 
factor was in input rents, which added 1.9 percentage points to 
month-on-month inflation. 
    "But the EU-norm inflation could be lower than expected as 
is does not contain input rents. Overall inflation outlook 
remains positive." 
     
    EDUARD HAGARA, ANALYST, ING BANK, BRATISLAVA 
    "Inflation data came in a touch above expectations. The 
biggest surprise was on the side of input rents, but this is not 
included in the EU-norm inflation. 
    "We do not expect any implications for monetary policy. We 
see interest rates staying flat throughout the year, and we 
expect a 25 basis point rate hike in the first quarter of 2008." 
     
MARKET REACTION: 
 - The crown showed no immediate reaction to May trade data. It 
stood at 33.325 per euro  as of 0715 GMT, compared with 
Wednesday's 13-week high of 33.300 and a close of 33.345. 
 
BACKGROUND: 
- Inflation data were calculated according to domestic 
methodology. 
- The central bank sets its goals according to inflation 
calculated under the EU-harmonised consumer price index as part 
of Slovakia's goal to adopt the euro in 2009. 
- The Statistics Office will release EU-norm inflation data for 
June on July 16. 
- The market followed local inflation data in the past because 
of their earlier release, but analysts started to pay more 
attention to statistics by EU-methodology after the two figures 
began to show wider differences earlier in 2007. 
- Slovak inflation accelerated in 2005 and 2006 due to hikes in 
natural gas and heating prices for households. 
- But price growth slowed down at the start of 2007 as the 
effect of energy price hikes faded away. 
- The central bank, which cut its key two-week repo rate by 25 
basis points to 4.25 percent in April after a rising crown 
tightened monetary conditions and helped improve the inflation 
outlook, held interest rates in June. 
     
LINKS: 
- For further details on June 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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