Slovakia: Inflation decelerates in February but remains high
Latest reading: Harmonized consumer prices increased 4.0% in annual terms in February, following a 4.3% rise in the previous month. Still, February’s reading was the highest in the euro area and was double the ECB inflation target, reflecting the effects of last year’s consolidation package, including the impact of the transaction tax.
Relative to the prior month’s data, price pressures reduced for food and non-alcoholic beverages in February (+2.7% in annual terms vs +3.9% in January). In contrast, there were more notable price pressures for transportation (-0.9% vs -1.8% in January) and recreation (+6.0% vs +5.9% in January). Finally, the changes in housing and utilities and restaurants and hotels were the same as in the prior month (+9.2% and +7.1%, respectively).
Meanwhile, consumer prices were up 3.7% in February, following a 4.0% rise in the prior month.
Lastly, harmonized consumer prices were up 0.12% in February on a month-on-month basis, following a 1.97% rise in the prior month.
Panelist insight: Commenting on the outlook, Matej Hornak, analyst at Erste Bank stated:
“For now, we expect price growth this year to remain similar to 2024, averaging around four percent. Current tensions in the Middle East have the potential to significantly influence inflation, given the region’s importance for energy commodities. […] Secondary effects—such as higher prices of intermediate inputs or services (including transport)—could also be substantial. As a result, the inflation rate will be strongly influenced by future developments in the conflict, and by any further increase or decrease in oil and gas prices.”