INSTANT VIEW 2-Slovak Aug CPI rises to 2.3 pct yr/yr

...percent, the Statistics Office said on 
Tuesday. 
*************************************************************** 
 
KEY POINTS: 
SLOVAK HEADLINE CPI     AUG 07     AUG 07 FCASTS 
  pct change mo/mo       +0.1          -0.1 
  pct change yr/yr       +2.3          +2.2 
     
(for full table please click ............ [ID:nPRG000494]) 
     
- August core inflation rate, which excludes the impact of 
changes to state-regulated prices and excise taxes, was flat 
month-on-month, compared with the market forecast of -0.1 
percent. 
- Housing, water, electricity, gas and other fuels prices rise 
by 0.4 percent in August, after being flat in July. 
- Prices of food and non-alcoholic beverages fall 0.4 percent on 
the month in August after a 0.6 percent drop in July. 
- Transportation prices, influenced mainly by oil costs, rise 
0.6 percent on the month in August, after a 0.2 percent growth 
in July. 
 
ANALYST COMMENTS: 
JURAJ VALACHY, TATRA BANKA, BRATISLAVA 
    "It was in line with our expectations, the food price 
decline was lower than we have expected. We expect EU-norm 
inflation to be -0.1 percent month-on-month and 1.2 percent 
year-on-year in August, when we should meet the Maastricht 
criteria. 
    "This figure is in line with the central bank's expectation 
and we do not see any reason for an interest rate change before 
the end of the year." 
     
MARKET REACTION: 
 - The Slovak crown was at 33.680 per euro  as of 0720 
GMT, compared with 33.650 before the release. It closed at 
33.690 on Monday. 
     
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 
August on September 14. 
- The market followed local inflation data in the past because 
of their earlier release, but analysts have 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 partly due 
to the government pressure on utilities. 
- The central bank, which cut its key two-week repo rate by 25 
basis points to 4.25 percent in March and April, after a rising 
crown tightened monetary conditions and helped improve the 
inflation outlook, held interest rates steady in July. 
     
LINKS: 
- For further details on August 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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