BRATISLAVA, December 21, (WEBNOVINY) — Inflation in Slovakia next year should be lower than the Finance Ministry originally estimated. Behind this is a lower than expected growth of energy prices, the unfulfilled intention to increase the excise tax on beer and the thus-far more favorable price development than anticipated. The Finance Ministry has therefore revised downward its prognosis of average growth of consumer prices next year by 0.4 percentage points from the original 3.7 percent to 3.3 percent, writes the Financial Policy Institute at the Finance Ministry in its current paper.
The lower than originally predicted growth in energy prices is the result of the regulator’s decision to approve slower hikes in prices of heat and natural gas than the finance department estimated in September. Electricity prices, on the other hand, are to grow more significantly than had been expected. Nonetheless, the regulator’s decisions contributed to a reduction of the estimated inflation next year by 0.2 points.
Due to the failure to approve the hike in excise tax on beer, the government’s consolidation package will have a smaller impact on inflation growth next year, by 0.9 points. The remaining decrease in the outlook of consumer prices growth is the actual development of prices in recent months. Headline inflation has stagnated around one percent since September. As the actual development of inflation was moderately lower than the ministry had expected, it expects a similar development next year.
The change in the expected inflation should represent an increase in expenditures of an average household by 28.1 euro per month, down by 2.5 euro a month from the figure expected earlier.
SITA
