INSTANT VIEW 1-Slovak Sept EU-norm CPI slightly below fcast

   BRATISLAVA, Oct 17 (Reuters) - Slovak consumer prices posted 
an unexpected fall in September from August, according to 
EU-norm data, slashing the annual inflation rate to 4.5 percent, 
data showed on Tuesday. 
     
SLOVAK EU-NORM INFLATION      Sept/06        Aug/06     Sept/05 
  pct change mo/mo             -0.2           -0.1       +0.3 
  pct change yr/yr             +4.5           +5.0       +2.3 
   
    - Analysts surveyed by Reuters had expected EU-norm 
inflation to be flat month-on-month, and 4.7 percent 
year-on-year in September. 
    - Food and non-alcoholic beverages, which have a strong 
weighting in the consumer price basket, fell by 0.1 percent 
month-on-month, after a 1.5 percent drop in August. 
    - Housing, water, electricity, gas and other fuels, which 
pushed inflation up early this year, rose 0.1 percent on month 
in September, after a 0.1 percent growth in August. 
    - Annual price growth in the housing category, which has the 
strongest weighting in the consumer basket, was 13.0 percent. 
    - Transport prices fell by 1.9 percent month-on-month, after 
being flat in August. 
 
    MARKET REACTION: 
 - The crown showed no immediate reaction to the inflation data. 
It traded flat from Monday's close at 36.830 to the euro shortly 
after the inflation data release. 
     
    BACKGROUND: 
 - The central bank follows inflation calculated by the 
EU methodology as a part of Slovakia's plan to adopt the euro in 
2009. 
 - Financial markets follow local-standards inflation more 
closely because it is released earlier and shows only minor 
differences from EU-norm data. Prices under the local 
methodology fell by 0.3  percent on the month and rose by 4.6 
percent year-on-year in September. 
 - The central bank expects annual EU-norm inflation at 3.7 
percent in December, above the year-end target of 2.5 percent. 
 - Slovakia wants to meet all criteria for euro adoption in 
2008. The central bank predicts inflation will fall to 2.8 
percent at the end of 2007. 
 - The central bank raised the key two-week repo rate by 25 
basis points to 4.75 percent in September. 
 - Analysts say more policy tightening will be needed this year 
to knock inflation down enough to meet euro entry criteria. 
     
    LINKS: 
  - For further details on September 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 
     
- For LIVE Slovak economic data releases, click on......<ECONSK> 
- Schedule of upcoming indicator releases............<SK/ECON09> 
- Summary of short-term economic data forecasts......<SK/ECON04> 
- Stories on Slovak currency moves........................[SKK/] 
- Slovak speed money guide ................................<SKK> 
- Slovak benchmark state bond prices .................<0#SKBMK=> 
- Slovak forward money market rates ....................<SKKFRA> 
 
 ((Reporting by Martin Santa, Reuters Messaging: 
martin.santa.reuters.com@reuters.net; +421 2 5341 8402)) 
  Keywords: ECONOMY SLOVAKIA INFLATION