Analyst: Inflation Probably Peaked at 4 percent in January

Bratislava, 16 February (TASR) – Prices of goods and services likely reached their peak for this year in January at 4 percent year-on-year, with inflation expected to decline in the coming months, said analyst Lubomir Korsnak from UniCredit Bank Czech Republic and Slovakia on Monday. According to analyst Matej Hornak from Slovak Savings Bank, inflation is expected to hover at around 4 percent throughout the year. "Inflation most likely reached its peak for this year as early as in January and will slow down very gradually in the coming months. On average, we expect it to be slightly above 3.5 percent this year," said Korsnak. Korsnak added that, in addition to regulated items, services will continue to drive inflation upwards, partly reflecting the record 12-percent increase in the minimum wage. According to Hornak, Slovakia could become one of the countries with the most-rapid price increases in Europe this year. The key reason, he said, is energy-price regulation, which has been kept in place for several years now. "Electricity and gas prices will push inflation higher in the coming years once they are adjusted to market levels," the analyst warned. Korsnak expects slow economic growth and consumption to dampen the transition of higher costs into end prices. He therefore anticipates a gradual easing in the year-on-year inflation rate for both goods and services during the year. Beyond the impact of higher VAT, food prices are unlikely to provide any significant additional boost to inflation this year, he added. This is indicated by developments in domestic agricultural commodity prices as well as the global food and agricultural commodity price index (FAO). mf/df