BRATISLAVA, January 2, (WEBNOVINY) — In 2011, consumer prices grew at the fastest pace in Slovakia in recent years. Energy prices along with government’s consolidation measures contributed to the growth. Bank analysts estimate inflation at 4.5 percent for the end of 2011, which would be the highest growth of consumer prices since 2008.
The growth pace of consumer prices accelerated significantly in early 2011, due to growing energy prices, namely of natural gas, heat and electricity, and the added fiscal measures aimed to reduce the general government deficit. The measures included increasing the VAT rate from 19 percent to 20 percent and canceling various tax exemptions.
As analyst of the bank Slovenska Sporitelna Sona Muzikarova said, behind the growth of inflation were also soaring food prices. In the second quarter of last year, the growth of consumer prices reached 4 percent. The second round of energy price growth for households in the summer pushed inflation up to 4.5 percent in the third quarter.
This year, the price growth should be lower than in 2011. Higher VAT rate will not increase year-on-year inflation. Furthermore, the expected economic slowdown should hamper price growth, too. Thus in spite of the continuing growth of energy prices, analysts forecast inflation to reach 2.3 percent in 2012.
SITA
