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Statement on the development of inflation (Development of consumer prices in February 2007)

Consumer prices, measured by the harmonized index of consumer prices, increased by 2.0% on a year-on-year basis (2.2% in January). Headline inflation, excluding energy and unprocessed foodstuffs (core inflation), was at the level of 1.8% (identical to 1.8% in January). In comparison to the previous month, the consumer prices went up by 0.1% while the core inflation remained unchanged. Inflation, measured by the harmonized index, reached a slightly lower level in February when compared with the NBS´s expectations.

The year-on-year growth rate of goods decreased, when within its development both the rate of growth of industrial goods and the one of foodstuff prices slowed down. Decline of the year-on-year growth of industrial prices was affected by the slowdown in the rate of growth of energy prices, when the fuel prices continued to drop and other energy prices also decreased its year-on-year growth. Prices for industrial goods excluding energy, reported the same year-on-year fall as in the previous month. The growth rate of foodstuff prices slowed down year-on-year, when the rate of growth of unprocessed foodstuffs declined and prices of processed foodstuffs on a year-on-year basis reported the identical growth rate as in the previous month. The year on year growth rate of prices for services stagnated, when in comparison to the previous month, nearly all groups of services reported the unchanged rate of growth. The more marked acceleration was only observed in prices for varied services, when the rate of growth of dentist prices and the one of social services increased.

The year-on-year growth rate of the headline inflation in March should moderately accelerate against the February figure, and that is owing to an expected development of fuel prices. Also prices for services might slightly accelerate on the year-on-year basis.

Jana Kovacova
Communications Section

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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