Statement on the development of inflation (Development of consumer prices in December 2006)

Consumer prices, measured by the harmonized index of consumer prices, increased by 3.7% on a year-on-year basis (also 3.7% in November). Headline inflation, excluding energy and unprocessed foodstuffs (core inflation), was at the level of 2.5% (also 2.5% in November). In comparison to the previous month, the consumer prices went up by 0.1% while core inflation remained unchanged. Inflation, measured by the harmonized index, reported a  lower level in December when compared with the NBS´s  expectations.

Within the basic structure of inflation, the year-on-year growth rate of prices of goods slightly accelerated in December, while the year-on-year growth rate of prices for services stagnated. In terms of prices of goods, the year-on-year growth rate of industrial goods prices remained at unchanged levels, while the year-on-year growth rate of foodstuff prices slightly accelerated. The stagnation of the year-on-year growth rate of industrial goods prices reflected an acceleration of the year-on-year growth rate of industrial goods prices without energy on the one hand, and a slowdown of the growth rate of energy prices on the other hand. Within prices of energy, prices of fuels reported slowdown of the year-on-year decline. Foodstuff prices reported acceleration of the year-on-year growth rate with a higher year-on-year growth rate both of processed and unprocessed foodstuffs. As for prices of processed foodstuffs, the prices for bread, other bakery products, sugar products and cigarette prices continued to increase. In terms of unprocessed foodstuffs, the year-on-year growth rate of vegetable prices, including potatoes, accelerated. The year-on-year growth rate of prices for services stagnated with a moderate deceleration of the year-on-year growth rate in prices for services connected with housing.

In January, regulated prices of gas, water and sewerage should go down on a month-on-month basis. Prices of electricity should stagnate. Foodstuff prices as well as prices for services should further go up. On the basis of current development of oil prices, decline of fuel prices can be expected. The year-on-year growth rate of headline inflation should decelerate more considerably under the influence of the base effect.

Igor Barat
Spokesman of the NBS

National Bank of Slovakia
Public Relations Department, Press 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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