Analysts Predict Inflation to Pick Up Pace in 2017

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Bratislava, January 13 (TASR) – The annual 0.5-percent drop in consumer prices in 2016 represents a mild deepening of deflation following a drop in prices by 0.3 percent on the year in 2015, Slovenska Sporitelna analyst Katarina Muchova said on Friday.

Meanwhile, the annual inflation in December alone was above zero (0.2 percent) after more than two years.

“The increase in inflation was contributed to by several forces, including a rise in prices in transportation and services. Not even the annual drop in the prices of foodstuffs and alcohol-free beverages by 1.3 percent was enough to send the overall index into deflation,” she added.

Tatra Banka analyst Juraj Valachy attributed the increase in inflation in December to oil prices having stabilised at higher levels.

“We expect average consumer inflation to be at around 0.7 percent for the whole of 2017. Inflation is gradually drawing closer to the target of the European Central Bank, which is just below 2 percent over the medium term,” said Muchova.

Valachy expects changes in the regulated prices of commodities such as natural gas, heating and water rates to be seen in January. “We expect the aggregate consumer inflation to reach 0.5 percent (in January) before gradually going up to 1 percent later in the year,” he added.

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