BRATISLAVA, June 16 (Reuters) - Slovak EU-norm consumer
prices rose by 0.4 percent on the month in May, putting the
annual inflation rate at 4.0 percent, the Slovak Statistics
Office said on Monday .
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KEY POINTS:
SLOVAK EU-NORM INFLATION MAY 08 MAY 08 FORECAST
pct change mo/mo +0.4 +0.2
pct change yr/yr +4.0 +3.9
(Details of April inflation data .............[])
- Food and non-alcoholic beverages rise by 1.0 percent
month-on-month, versus a 1.2 percent increase in April.
- Housing, water, electricity, gas and other fuel prices rise by
0.2 percent in May, after a 0.1 percent rise in the previous
month.
- Transportation prices rise by 0.6 percent month-on-month,
after being flat in April.
- The food and non-alcoholic beverages category is up 8.4
percent on the year.
- Annual price growth in the housing category is 3.4 percent in
May.
ANALYST COMMENTS:
MARIA VALACHYOVA, SENIOR ANALYST, SLOVENSKA SPORITELNA
"It was in line with expectations; food prices were the key
driver ... This was, however, no big surprise."
"Risk for the end-year comes with oil prices, which could
deliver higher heating and gas prices."
"We expect demand-led inflation pressure in the coming
months to be tamed, thanks to the strong crown."
LUBOMIR KORSNAK, ANALYST, UNICREDIT BANK
"There was no surprise as EU-norm inflation figures came in
line with local inflation data. The structure shows it was
driven by the prices of food and transportation, which includes
the price of oil."
"Slovakia should stay with a relatively big reserve below
the (euro zone) inflation threshold (in May)."
"We do not register major demand-led inflation pressures,
causing economic overheating... The crown's strengthening has
tightened monetary conditions, which allows the central bank to
preserve monetary policy settings."
"We expect that the European Central Bank could hike its key
interest rates by 25 basis points in the near term .. thus
Slovak central bank shouldn't need to cut rates."
JURAJ VALACHY, ANALYST, TATRA BANKA
"It was in line with local inflation data, the biggest rise
was seen with prices of food ... For the coming months ...
dynamics could accelerate very slightly year-on-year."
"The central bank has no reason to rush with aligning with
European Central Bank interest rates, especially when the ECB
rates are likely to go up (hike) next month."
BACKGROUND:
- Slovakia has met the inflation condition for euro adoption and
the European Commission recommended it to become the 16th member
of the euro zone in January 2009.
- Slovak price growth has accelerated in the past few months,
mainly on rising cost of food and energy, but European
Commission forecasts showed inflation should stay under the euro
reference level both this year and in 2009.
- The European Central Bank has expressed concerns about Slovak
inflation outlook after euro adoption.
- The central bank left its key two-week repo rate at 4.25
percent in May, maintaining steady borrowing costs for the 13th
month in a row.
LINKS:
- For further details on May 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........................[]
- Slovak speed money guide ................................<SKK>
- Slovak benchmark state bond prices .................<0#SKBMK=>
- Slovak forward money market rates ....................<SKKFRA>
(Reporting by Peter Laca and Martin Santa; Editing by Michael
Winfrey)
