INSTANT VIEW 2-Slovak Dec CPI slightly below fcasts

    BRATISLAVA, Jan 12 (Reuters)  - Slovak consumer prices were 
flat month-on-month in December, putting the annual inflation 
rate at 4.2 percent, the Statistics Office said on Friday. 
     
KEY POINTS: 
SLOVAK HEADLINE CPI      DEC 06    NOV 06     DEC forecast 
  pct change mo/mo         0.0      +0.6       +0.1 
  pct change yr/yr        +4.2      +4.3       +4.3 
 
(Details of Dec inflation data ............... [ID:nPRG000198]) 
     
     
- Analysts surveyed by Reuters had expected consumer prices to 
have risen by 0.1 percent on the month, for an annual rate of 
4.3 percent in December. 
- The core inflation rate, which excludes the impact of changes 
to state-regulated prices and excise taxes, was forecast at 0.1 
percent month-on-month and at 2.9 percent on an annual basis. 
- Prices of food and non-alcoholic beverages rise by 0.2 percent 
on the month in December, down from 0.7 percent in November. 
- Housing, water, electricity, gas and other fuels, which have 
the strongest weighting in the consumer basket, are flat in 
December, after a 1.6 percent rise in the previous month. 
- Transportation prices, influenced mainly by oil costs, fall by 
0.5 percent on the month in December, after a 0.7 percent drop 
in November. 
 
COMMENTARY: 
    SILVIA CECHOVICOVA, ANALYST, CSOB BANK, BRATISLAVA 
    "Inflation was slightly better than expected, but it is no 
big surprise. I think the data will have a neutral impact on 
monetary policy. Rates will stay unchanged, and the inflation 
outlook is favourable. The annual inflation rate is expected to 
fall to near 3 percent in January because of the base effect." 
 
MARKET REACTION: 
    The crown  showed no immediate reaction to 
inflation data, trading flat at 34.520 to the euro as of 0805 
GMT. 
 
BACKGROUND: 
- Inflation data were calculated according to domestic 
methodology. 
- The central bank more closely follows inflation calculated 
under the EU-harmonised consumer price index, but the market 
pays attention to local data as they signal trends with shop 
prices. 
- The Statistics Office will release EU norm inflation data for 
December on Jan. 17. 
- The central bank sets its inflation targets according to EU 
norm data as part of Slovakia's preparation for joining the euro 
in 2009. 
- Slovak inflation accelerated in 2005 and 2006 due to hikes in 
natural gas and heating prices. 
- The central bank raised the key two-week repo rate by 175 
basis points in 2006 to fend off inflation risks stemming from 
high energy prices and fast economic growth. 
- A Reuters poll earlier this week showed all analysts expecting 
the two-week repo to stay unchanged at 4.75 percent in January. 
   
LINKS: 
- For further details on December 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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