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NBS Monthly Bulletin, January 2012 - Summary

The annual rate of euro area inflation, as measured by the Harmonised Index of Consumer Prices, fell in December to 2.7%. The exchange rate of the euro against the US dollar depreciated in comparison with the previous month. At its meeting on 12 January 2012, the ECB’s Governing Council decided to leave the key ECB interest rates unchanged, with the main refinancing rate standing at 1.00%, the marginal lending rate at 1.75% and the deposit rate at 0.25%.

The annual rate of change in the HICP inflation rate in December decelerated in both the Czech Republic and Hungary, to 2.8% and 4.1%, respectively, while in Poland it accelerated moderately, to 4.5%. Both the Czech koruna and Hungarian forint were lower against the euro at the end of December than at the end of November, due to developments in financial markets. The Polish zloty, by contrast, appreciated against the single currency. Among the central banks of the three countries, only Hungary’s Magyar Nemzeti Bank changed its monetary-policy settings in December, raising the base rate by 50 basis points, to 7.00 %, with effect from 21 December. Both Česká národní banka and Narodowy Bank Polski kept their key rates unchanged in December, at 0.75% and 4.50%, respectively.

In Slovakia, the annual rate of HICP inflation in December decelerated month-on-month, to 4.6%. The slowdown in price level growth reflected a lower annual rate of change in prices of energy and services, as well as a year-on-year decline in prices of unprocessed food. Looking at industrial producer price inflation, its annual rate of change in November rose moderately in comparison with the previous month, and this, too, reflected mainly higher growth in energy prices. As for construction work prices, their annual rate of change decreased slightly. Prices of agricultural products fell year-on-year in November after a long period of growth.

The current account surplus in November was lower than in October, owing mainly to a decline in the trade surplus; it also reflected a moderate month-on-month increase in the income balance deficit. On the other hand, both the services balance and current transfers balance improved in November and therefore had a positive effect on the current account surplus. Turning to the industrial production index (IPI), its annual rate of change slowed sharply in November due in large part to a base effect. However, a majority of industrial sectors also made a negative contribution to the overall index. Production growth decelerated in both the transport equipment sector and the machinery and equipment sector. In construction production, the annual rate of decline increased in November. As for sales in selected sectors, their annual rate of change maintained a downward trend in November, reflecting mainly sales figures in the sectors of industry, construction, and information and communication. The overall economic sentiment indicator in December declined both in year-on-year and month-on-month terms. Although confidence rose in the industry and services sectors, it fell in the construction and retail trade sectors, and consumer confidence also declined.

The year-on-year rise in the average nominal wage was markedly lower in November than in the previous month, while real wages declined in comparison with the previous year. The lower rate of nominal wage growth reflected mainly slower wage growth in the transport and storage sector and a decline in wages in the selected market services sector. To a lesser extent, wages in industry also contributed to the slower growth in nominal wages. Annual employment growth in November was again moderately lower than in the previous month, with almost all sectors recording a drop in year-on-year job growth. The rate of registered unemployment rose slightly in November in comparison with the previous month, to stand at 13.3%.

In the area of private sector deposits, the stock of deposits from both non-financial corporations and households increased in November in comparison with the previous month. In year-on-year terms, however, the amount of deposits from non-financial corporations declined moderately. As for household deposits, the month-on-month decline in current account deposits in November was offset by an increase in term deposits. Overall, the annual rate of change in household deposits was positive and remained largely unchanged. There was a similar pattern in lending to the private sector, as the outstanding amount of loans to both non-financial corporations and households increased in November in comparison with October. In the case of corporate loans, growth was recorded across all maturities but it was most pronounced in long-term products. In the household sector, the sharpest growth was in housing loans and, to a lesser extent, in consumer loans. In both sectors, the annual rate of change in lending was positive, albeit more moderate than in the previous month. Retail interest rates in November were affected by the ECB’s decision to cut its key interest rates. The rate cut passed through mainly to lending rates for non-financial corporations; they declined month-on-month, with large corporations seeing the largest drop in borrowing costs. By contrast, bank lending rates for households increased moderately. In line with market rate changes, deposit rates fell slightly month-on-month for both non-financial corporations and households.

Petra Pauerová
Spokesperson of the NBS

National Bank of Slovakia
Press and Editorial Section
Imricha Karvasa 1, 813 25 Bratislava, Slovak Republic
Tel.: +421-2-5787 2142, +421-2-5865 2142, +421-2-5787 2169, +421-2-5865 2169

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