BRATISLAVA, February 22, (WEBNOVINY) – The Slovak government wants to try squeeze high food prices in Slovakia. Agriculture Minister Zsolt Simon told Tuesday’s news conference that in the near future, the government would adopt several legislative changes that are to at least partially cut food prices. The ministry is preparing legislation to create a system of securing basic food stuffs for low-income families. The department will also focus on support to Slovak product brands of high quality. Furthermore, debate on the European Union level on trading on the sugar market should positively influence food prices, too, hopes the ministry. “We are also preparing a legislative change to eliminate all administrative barriers in particular in food codices, which are above EU standards,” said Simon.
Prime Minister Iveta Radicova did not rule out a possibility to reduce the value added tax on foodstuffs. Radicova added that experience from neighboring countries show that the VAT reduction did not bring the desired effect of squeezing food prices. The government is therefore seeking other solutions. According to the prime minister, measures to improve the state’s regulatory policy in energy prices will also contribute to a decrease in food prices.
“The situation is not easy. Slovak economy and the Slovak food market is to a great extent dependent on imports,” Simon continued. He sees the situation on global markets behind the growth of food prices here. He believes that the previous government also is behind the increase. “The previous government started experimenting with protection of Slovak suppliers,” he said with regard to the law on retail chains, which the incumbent government canceled. “Behind the inappropriate increase in food prices could also be speculators on the markets. We will look for a way to resolve this. We all know very well that Slovakia is not who defines global prices,” Simon concluded.
As expected, growth of prices in Slovakia accelerated at the beginning of the year. According to Statistics Office data, January y/y inflation measured by national methodology reached 3 percent, which was 1.3 percent in December. In a month-on-month comparison, consumer prices rose 1.9 percent in January, which was 0.3 percent in December. In yearly terms, in particular prices of food and soft beverages rose 6.1 percent. According to ING Bank analyst Eduard Hagara, global factors, such as price growth of foodstuffs and motor fuels, as well as local factors, including the increase in VAT rate and regulated prices contributed to acceleration of inflation in January.
SITA