Slovakia’s consumer prices increased by 2.7% year-on-year in October, the second highest inflation within the EU, which is partly the result of the European Central Bank's (ECB’s) “extreme policy”, according to Saxo Bank analyst John Hardy. In month-on-month terms, consumer prices dropped by 0.1%, the Slovak Statistics Office reported on November 14.
Core inflation amounted to 2.4% and net inflation to 1.7%, affecting the total inflation by -0.12 percentage points (pp) m/m in October. “Regulated prices affected the total inflation by 0.03pp, indirect taxes did not affect the total inflation. Core inflation was affected by food prices by -0.08pp, net inflation had an influence on core inflation by -0.04pp,” the statistics office's report read.
In 10M19 inflation has increased by 2.6% y/y, with the consumer price index down m/m in October in employed households and retired households, both by 0.1%. In annual terms, the index of consumer prices in October accelerated in households of employees by 2.6%, in the households of pensioners by 3.2% and in low-income households by 2.9%.
“If we look into the past, ten years ago you could buy significantly more goods in Slovakia than, for instance, in France. However, in the wake of high inflation the prices have quickly swelled almost to match those of Western Europe. Slovakia is one of the countries where zero or negative ECB rates are unquestionably detrimental. Furthermore, at a time when the rate of indebtedness is rising to all-time highs, the ECB policy poses a great risk,” Hardy said, the Slovak News Agency reported.
He added that the country should invest more into infrastructure, digital networks and digitisation.