Development of consumer prices in March 2008

Consumer prices, measured by the harmonized index of consumer prices, increased by 3.6% on a year-on-year basis (3.4% in February). Headline inflation, excluding energy and unprocessed foodstuffs (core inflation), reached the level of 3.7% (3.5% in February). In comparison to the previous month, consumer prices went up by 0.3% while core inflation increased by 0.2% on a month-on-month basis. The average year-on-year rate of inflation for 12 months reached the level of 2.2%, from September 2006 to August 2008. On average, inflation reached the level of 3.4% from the beginning of the year.

The development of HICP in March was nearly in line with the NBS´s expectations. The growth of prices for services at dentists continued. Within the basic structure of inflation, the year-on-year growth rate of both goods and services increased. Within the prices of goods, industrial goods reported a faster year-on-year growth of prices than those of foodstuffs. The development of industrial goods prices was influenced by the deceleration of the year-on-year decline in prices of industrial goods excluding energy (after 14 months), as well as by the acceleration of the growth rate of energy prices. In March, within energy prices, prices for heating increased, while on the other hand the year-on-year growth of fuel prices slowed. The year-on-year growth rate of foodstuff prices accelerated, while the year-on-year growth of processed foodstuff stagnated and the rate of growth of unprocessed foodstuffs accelerated. The accelerated growth rate of unprocessed foodstuff prices was caused by a decrease in the year-on-year decline of prices for vegetables, with a high dynamic in fruit prices, as well as by the growth of meat prices. Prices for services on a year-on-year basis increased moderately. When, in comparison with the previous month, the growth rate in services connected with housing, medical care, prices for dentists and social services particularly increased.

The year-on-year growth rate of headline inflation in comparison with March figures should slightly decrease in April 2008, as an impact of the year-on-year decrease of fuel prices together with a lower year-on-year growth rate of foodstuff prices (basic effect of the significant month-on-month increase of these prices for the same period last year.) On the other hand regulated prices (school boarding) could report a slightly higher year-on-year rate of growth.

Jana Kovacova
Spokesperson of the NBS

National Bank of Slovakia
Communications Section
Imricha Karvasa 1, 813 25 Bratislava, Slovak Republic
Tel.: +421-2-5787 2161,+421-2-5865 2161, +421-2-5787 2166, +421-2-5865 2166
Internet: http://www.nbs.sk

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