In July inflation reached 13.6%, though it rose significantly slower than in the previous months

Consumer prices rose at a double-digit rate for the fifth consecutive month. The most important expenditure items of Slovak households - food and housing, including energy - were more expensive year-on-year almost by a fifth. Currently, prices were higher due to more expensive solid fuels, bread and meat. July, however, brought cheaper fuel.

In July 2022, consumer prices increased by 0.8% month-on-month, but the growth dynamics was slower than in June. The current value was significantly below the growth average since the beginning of the year, when the prices of goods and services rose by an average of 1.5% month-on- month.

Year-on-year inflation has grown continuously for the eighteenth consecutive month and reached 13.6%, but the overall growth dynamics has a downward trend since April.

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Month-on-month development - July 2022 compared with June 2022

Prices rose month-on-month in 9 out of 12 divisions (household expenditure groups). The most significant influence on the month-on-month change was still the rising prices of some foodstuffs. In July, their growth rate slowed from 2.4% in June to 1.4% in July. Price growth was mainly influenced by higher prices of oils and fats by 3.9%, bread and cereals by 3.3%, milk, cheese, eggs by 1.7% and meat by 1.5%. The prices of vegetables dropped by 3.6% and fruit by 1.5%, but the seasonal effect must also be taken into account.

The price increase in the housing and energy division by 1% was mainly influenced by higher prices of imputed rent by 2% (influence of the price increase of construction materials), and the higher prices of solid fuels by 4.5% more dynamic month-on-month, and the prices for maintenance and repairs of dwellings continued to rise in in July by 0.8%.

On the contrary, lower fuel prices by 1.5% had a dampening effect on inflation, as a result of which the entire division of goods in transportation was in slightly negative numbers. Fuels became cheaper in July for the first time since December 2021, while in the first half of 2022 their prices rose by an average of 4.6% month-on-month.

A price increase was also recorded for items related to the holiday period. The prices of package holiday tours rose by 6.5%. Conversely, prices in restaurant and hotels rose much more slowly than in the previous months.

From the perspective of 12 basic commodity groups (divisions), except transportation, the price drop was also manifested in the clothing and footwear sector.

In July, compared to June, the consumer price index increased in households of employees and in low-income households equally by 0.8%, and by 0.9% in the households of pensioners.

Year-on-year development - July 2022 compared to July 2021

The annual value of inflation rose to 13.6% in July 2022. It is another of the records of the last more than 20 years, however the summer dampened the dynamics of price growth. In comparison with June, inflation increased by only 0.4 percentage points (p.p.), while in the first months of the year, inflation increased by 1.4 p.p.

In the seventh month of the year, prices increased in all monitored divisions of the consumer basket, up to half of the total of 12 divisions reached a year-on-year growth of more than 9%.

The division of food and non-alcoholic beverages mainly contributed to the year-on-year increase in prices. Prices of food rose by 19.9% and non-alcoholic beverages by 10.2%. Taking into account the share of purchased items in the consumer basket, inflation was most influenced by higher prices of bread and cereals by 23.4%, meat by 20.1%, as well as milk, cheese and eggs by 21.8% year-on-year. At the same time, increases in prices of oils and fats exceeded the 50% threshold in July. The peak of the summer season was slightly moderated by a year-on-year rise in prices of vegetable and fruit, but consumers continued to pay by a tenth more for vegetables than a year ago.

As for the impact on price growth, a rise in prices in the division of housing and energy was in second place. The division represents the largest, up to a quarter share in household expenses. Prices in this division were by 16.1% higher year-on-year in July, while the increase in energy prices from the beginning of the year was accompanied by the higher prices of solid fuels. The impact of higher prices in construction materials also continued, pushing the imputed rent to a new maximum of 19.9% year-on-year.

In the division of transport, prices were up by a fifth year-on-year, while the main driver - fuels were by 36.5% more expensive than a year ago. However, in June, their year-on-year growth exceeded 40%.

Prices of restaurants and hotels were also higher by more than 20% year-on-year, but currently they did not change significantly during July. However, prices of other divisions continued to grow - goods and services included to the group of personal care rose by 11.3% year-on-year (hairdressing services and the like). Non-durable household goods also reached the threshold of 15% as part of the year-on-year shift in prices, which was mainly affected by more expensive cleaning products.

In July 2022, the consumer price index increased, year-on-year, in households of employees by 13.5%, low-income households by 13.9%, and households of pensioners by 14.7%.

In summary, for the first seven months of 2022, consumer prices increased by 11.3%, year-on-year, on average (in households of employees by 11.2%, low-income households by 11.4%, households of pensioners by 12.2%).

Development of core and net inflation

In July, the total year-on-year inflation rate was 13.6%, core inflation reached 13.3% and net inflation 11.4%. Month-on-month, core inflation was 0.9% and net inflation reached 0.8%.

Core inflation is affected by an increase in price level after excluding the impact of changes in regulated prices (e.g. energy prices) and other administrative measures (e.g. tax adjustments, etc.). Net inflation is core inflation without changes in food prices.