Business News

Annual Inflation at 1.8%, Deflation at Monthly Level (II)

Ljubljana, 09 February (STA) - Winter sales brought down consumer prices in Slovenia by 0.8% in January, while inflation at the annual level was 1.8%, the same as the month before, calculations from the Statistics Office (SURS) show.

"This is traditionally negative monthly inflation...affected by seasonal factors, mainly sales of clothing, footwear and sports gear," SURS deputy director Genovefa Ruzic told Wednesday's press conference.

Prices of clothing and footwear fell by 15.4% due to end-of-season sales, pushing down total price growth by 1.3 percentage points.

The sales also contributed to an 11% drop in prices of sports equipment in the group recreation and culture. The same group saw a 5.8% fall in prices of package holidays.

Also down were prices of postal services (-7.4%), as a result of some postal services being exempt from VAT as of January 2011.

Meanwhile, January brought higher prices of food and non-alcoholic beverages (by 2.4%), and higher energy prices (2.4%).

Higher food prices were due to a 9.9% hike in prices of vegetables, 4% increase in fruit prices, a 2.8% rise in prices of milk, cheese and eggs, a 2% rise in oil and fat prices, among other things.

Higher prices of food and non-alcoholic beverages pushed inflation up by 0.4 of a percentage point and higher energy prices by 0.3 of a percentage point.

Measured with the harmonised index of consumer prices, the EU standard, January's deflation was 0.4%. The annual price growth was 2.3% (last year 1.8%), while the 12-month average price growth was 2.1% (last year 0.9%).

The Institute of Macroeconomic Analysis and Development said the price trends in January were similar to those recorded a year ago, but warned of a more substantial contribution of food price hikes to inflation in February.

The hike in vegetable prices is comparable to that recorded a year ago, but unlike last January, this time prices of other foodstuffs rose too, the boss of the government think-tank Bostjan Vasle said.

"This is mainly a result of price hikes on foreign markets transferring into retail prices at home, a trend that will continue in the coming months, so we expect further growth in retail prices of food."

In one year, prices of alcoholic beverages and tobacco rose the most (7.8%), followed by prices in housing, water, electricity, gas and other (7.4%), food and non-alcoholic beverages (3.7%).

Year-on-year, prices decreased in two statistical groups: restaurants and hotels (by 11.1%) and recreation and culture (by 0.9%).

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