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Inflation Edges Down to 1.3% in February (II)

Ljubljana, 26 February (STA) - The annual inflation rate in Slovenia edged 0.2 percentage points lower to 1.3% in February, the Statistics Office said on Friday. The monthly inflation rate stood at 0.4%.

While higher costs of fuel, and municipal services caused the monthly rise in prices, the annual inflation rate was subdued by lower prices of food (by 1.2%) and clothes (by 5.7%) compared to February 2009.

Saying that the decrease in the annual rate in February had been expected, the government's top economic think tank expressed concern with persistent increases in prices of municipal services.

According to the Institute for Macroeconomic Analysis and Development (IMAD), prices of municipal services continue to deviate from price trends. In February, prices of municipal services rose by 2.9%, to represent the biggest increase, ahead of fuel and gas prices, which went up by 1%.

IMAD pointed out that with an average rise of 7.2%, Slovenia led the eurozone in terms of the increase in prices of municipal services in 2009.

"These discrepancies in prices of municipal services reflect the shortcomings of the current system of administering prices...after the decision last July to give municipalities the power to determine prices on their own," IMAD director Bostjan Vasle said.

Contributing the most to the annual rise in prices were home expenses, which rose by 8.4% on average. Prices of alcohol and tobacco were up by 7.6% and those of hospitality services rose by 1.8%, the Statistics Office said.

The harmonised consumer price index, an EU-compatible measure of inflation, stood at 1.6% on a yearly basis, which is 0.2 percentage points less than a month earlier.

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