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Gas price fall to squeeze inflation in Slovakia

Xinhua, July 30, 2015 Adjust font size:

The fall in average gas prices of 3.91 percent for households and of 3.7 percent for small businesses as of September as announced by state regulatory authority will have an effect on inflation in Slovakia, local news agency TASR reported on Thursday.

The reduction in gas prices will squeeze price developments by more than 0.1 percentage point, Tatra banka analyst Boris Fojtik said, expecting the consumer price index to remain moderately negative "for a short period" due to this.

Noting that inflation is now far from the European Central Bank's goal of slightly below 2 percent on a yearly basis, Slovenska sporitelna bank analyst Katarina Muchova said, "Our original estimate for yearly inflation in September was close to zero, but following the gas price fall it might drop by 0.2 percentage points."

Fojtik believes gas prices will reduce the expected inflation rate of 1.35 percent next year to 1.20 percent. Endit