Slovakia: Harmonized inflation wanes in December
Latest reading: Harmonized inflation eased to 3.2% in December (November: 3.6%), coming in below market expectations but remaining above the ECB’s 2.0% target. Looking at the details of the release, the lower inflation reflected slower price growth for food and non-alcoholic beverages. That said, price pressures for housing and utilities plus transport increased at a faster pace.
The trend pointed down, with annual average harmonized inflation falling to 3.1% in December (November: 3.4%). Meanwhile, consumer price inflation fell to 2.9% in December from November’s 3.2%.
Lastly, harmonized consumer prices dropped 0.48% from the previous month in December, contrasting November’s 0.25% increase.
Panelist insight: Commenting on the outlook, Marian Kocis, analyst at Erste Bank, stated:
“In 2025, inflation will be driven mainly by the effects of consolidation measures, such as a higher VAT and increased business costs due to higher taxation or the introduction of a financial transaction tax. These higher costs will be passed on to consumers. The labor market will remain resilient, and core inflationary pressures will persist. We expect that, unlike most eurozone countries, inflation in Slovakia will remain higher compared to 2024, while the ECB will continue to lower its interest rates. […] However, due to the continued government policy of capping household energy prices, risks are tilted to the downside.”