Analysts Unsurprised by Slight Acceleration in Inflation in December

Bratislava, January 14 (TASR) - Analysts weren't surprised by the inflation figures for December, which accelerated from 1.5 percent in November to 1.6 percent, despite a moderate monthly drop in consumer prices. Consumer prices grew by 1.9 percent on average over 2020, compared to the 2.7 percent reported for 2019. The slowdown in inflation growth in 2020 can be chiefly ascribed to the coronavirus pandemic, which resulted in lower commodity prices on global markets (including for oil), as well as in the easing of wage pressures and subsequently in the gradual easing of demand inflation and the rate of growth in market service prices, stated analysts. "The acceleration of inflation in the last month of the year can chiefly be attributed to recovering oil prices on the global market, dragged up by expectations that the pandemic will soon ease and of a robust recovery in global demand," said UniCredit Bank Czech Republic and Slovakia analyst Lubomir Korsnak. At the end of the year, however, the growth in prices of marketable goods accelerated as well, which is probably the result of retailers reflecting the cost of anti-pandemic measures in the prices of their goods. Conversely, even more significant inflation growth was hampered by decreasing prices for food and market services. Wood & Company analyst Eva Sadovska pointed to the fact that last year's inflation was mainly driven by prices in miscellaneous goods and services and in education, both of which rose by 4.1 percent. Prices of housing, health care and in hotels and restaurants grew by 2.6 percent each. Prices of food and non-alcoholic beverages rose by 2.5 percent in 2020. "Transport was the only segment to post a drop of 3.4 percent for the whole of last year," stressed Sadovska. The drop resulted from the decrease in oil prices on global markets and subsequently a drop in prices at petrol stations. Sadovska expects the prices of goods and services to post y-o-y growth in the upcoming months, often in the range between 1 and 2 percent. Nevertheless, she doesn't expect deflation or falls in prices on a y-o-y basis within the next few months. Prices of food and non-alcoholic beverages should see growth of between 1 and 2 percent, while electricity and gas supplies should be cheaper thanks to the drop in prices declared by the Regulatory Authority for Network Industries (URSO). ko/df