BRATISLAVA - Vladimír Bačišin - The slowdown in price growth continued to be reflected in September in the most important components of household expenditure, with food currently costing only 11.3% and housing 6.5% more expensive, according to the Statistical Office of the Slovak Republic. However, prices jumped slightly month-on-month, driven by rising prices of school and health care fees, telecom operators' services, as well as fuel. Inflation continued its downward trend on a year-on-year basis, falling from 8.9 % in August to 8.2 % in September.
The sharper decline was prevented by a month-on-month increase in prices by an average of 0.3 %, mainly influenced by the traditional September price increase in the education sector, which was also supported by continued growth in the prices of petrol and diesel as well as selected services.
Month-on-month developments - September 2023 compared with August 2023 Prices of goods and services rose by 0.3% in September compared with August, as a result of price increases in 8 of the 12 main monitored sectors (household expenditure groups). The most significant effect was a 3.1 % increase in the education sector. Thus, at the beginning of the new school year, consumers had to cope mainly with higher prices for pre-primary and primary education, but also for secondary and language education. The second most significant effect was a 0.5% increase in transport prices, mainly due to higher fuel prices of 1.2%.
Following seasonal sales, prices of clothing and footwear also rose by 1.2% month-on-month, prices of dental services rose by 2.2% in the health sector, and prices of telecommunication services (2.6%) and canteen meals (1.8%) also rose significantly. Higher prices for alcoholic beverages and tobacco also contributed to the increase in the average price level in September by 0.6 %, but especially for beer and spirits.
Prices in the food and non-alcoholic beverages sector, which has the second largest weight in Slovak household spending, were unchanged month-on-month in aggregate, and this was also true for their component - the Food group. In most of the 9 food groups (classes) prices decreased. In particular, vegetables became cheaper month-on-month by 2.3 %, as well as milk, cheese and eggs by 0.5 % (influenced by price reductions in cheese, yoghurt). Prices of fruit, oils and fats also fell compared to August. In contrast, prices of bread and cereals, meat, and sugar and confectionery increased slightly.
Prices were also unchanged month-on-month in the most important expenditure item of Slovak households, housing and energy.
Only 2 expenditure groups - recreation and culture, and miscellaneous goods and services - recorded a downward trend. Organised holiday trips had lower prices than in August, as well as office and school supplies or even personal care prices.
The consumer price index increased by 0.3 % in September compared with August in employee households, by the same 0.3 % in low-income households and by 0.2 % in pensioner households.
Year-on-year development - September 2023 compared to September 2022
Annual headline inflation in September was 8.2 %. Thus, annual price increases moderated for the seventh consecutive month. Of the 12 sectors (household expenditure groups), only in eight sectors did the year-on-year price dynamics decline, with the exception of only four sectors, which recorded month-on-month increases or stagnation in the prices of selected goods and services - transport, alcoholic beverages and tobacco, and postal and communications, as well as health care.
Higher prices of food and non-alcoholic beverages have had the biggest impact on headline inflation in the long term. The growth rate of food prices has been slowing down for the sixth month, and in September they were 11.3% more expensive year-on-year. The pace of year-on-year growth slowed in all 9 food components. More than 20% y-o-y price growth remained only for sugar, jam and confectionery.
Price growth in housing and energy fell to 6.5 % in September 2022 compared to September 2022, the lowest level of price growth since the end of 2021.
Despite the month-on-month increase, fuel was still 0.6 % cheaper than a year ago. However, price increases in the transport services group accelerated to 22.5 %.
A more significant decline in headline inflation was prevented by a rise in prices in the postal and communications sector, mainly due to an increase in telecommunications operators' fees to 5.1 %. Similarly, price rises in the alcoholic beverages and tobacco sector had a negative impact on inflation, with consumers paying on average 9.4 % more for them than a year ago.
In September 2023, the CPI increased by 8.2 % year-on-year for employee households, by 8.5 % for low-income households and by 7.9 % for pensioner households.
In total, in the first nine months of 2023, consumer prices reached an annual growth of 12 % (employee households 11.9 %, low-income households 12.7 %, pensioner households 12.5 %).
Evolution of nuclear and net inflation
With September's headline annual inflation rate of 8.2 %, core inflation was 8.8 % and net inflation 8 %. On a month-on-month basis, core inflation and net inflation reached 0.3 %.
(financnenoviny.com/JAV)
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