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Development of consumer prices in September 2008

Consumer prices, measured by the harmonized index of consumer prices, increased on a year-on-year basis by 4.5% in September 2008 (4.4% in August). Headline inflation, excluding energy and unprocessed foodstuffs (core inflation), reached the year-on-year growth rate of 4.3% (4.2% in August).

In comparison to the previous month, the consumer prices went up by 0.4%, while the core inflation increased by 0.4% on a month-on-month basis. The average year-on-year rate of inflation for 12 months reached the level of 3.6%, from October 2007 to September 2008. On average, inflation reached the level of 4.0% from the beginning of the year. In September, the harmonized index of consumer prices recorded a slightly higher figure then the NBS expected, as a result of rather significant than expected growth of prices for heating and restaurant services.

Within the structure of inflation, a year-on-year growth rate of prices for unprocessed foodstuffs decreased, the year-on-year growth rate of energy prices as well as that of core inflation stagnated (total amount – excluding energy and unprocessed foodstuffs).

Within energy prices, the year-on-year growth rate of fuel prices decreased in September. On the other hand, the year-on-year dynamics of prices for heating accelerated. The deceleration of the year-on-year growth rate of unprocessed foodstuff prices was caused by the decrease of the growth rate of prices for fruits, vegetables and meat as well. The year-on-year development of core inflation (total amount excluding energy and unprocessed foodstuff) was affected by prices for services that accelerated on a yea-on-year basis.

Prices for services related to transport sector grew more rapidly in comparison with the previous month (driving school and passenger bus traffic), as well as personal services (in particular boarding for employees in companies, but also prices in restaurants) but also prices for medical treatment. On the other hand, the year-on-year growth rate of industrial goods´ prices within the core inflation as well as that of processed foodstuffs decreased. In the slower year-on-year dynamics of industrial goods´ prices excluding energy, a progress in prices for nondurable goods was shown. Prices of processed foodstuffs lowered their dynamics on a year-on-year basis, when the growth rate of bread and cereals, oils and fat decreased and a slow-down in milk and dairy products continued. The growth in prices of cigarettes was still not reflected in prices of processed foodstuffs as a result of growing excise tax from January 2008. The year-on-year dynamics of the headline inflation could slow down in October, as compared to September 2008 due to the basic effect in foodstuff prices. On the other hand, an increase in prices for heating should continue in October and prices of cigarettes should also go up.

Jana Kováčová
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

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