Slovakia is among the countries with higher inflation, but people have felt the rise in energy prices so far, says the chief economist of the NBS.
Inflation in Slovakia already exceeded 14 percent in September, eight countries in the European Union, the Czech Republic, Hungary, and the Netherlands had higher price growth than Slovakia. Food prices in particular grew rapidly, next year inflation will be pushed up by energy prices.
Chief Economist of the National Bank of Slovakia (NBS) Michal Horváth says that the difference between countries is in the share of energy in consumption baskets, the way in which their prices are regulated is also important. In other countries, the pass-through of energy price hikes to bills is much greater and is already happening to a large extent there. In Slovakia, we will suddenly feel it in January 2023.
In its base scenario, the NBS estimates that average inflation next year will reach 18 percent. It was based on the fact that gas, electricity, heat for the household will rise by approximately 100 percent. Horváth says that a consensus has been formed among other analysts that they will rise by 50 percent, so inflation would reach 13 percent. What it will really be depends to a large extent on the amount and form of compensation for expensive energies.
“I personally quite like the German model, where people have a certain level of consumption at a price artificially set by the government and everything depends on the development of world markets.”
He goes on to say in the interview:
- During the recovery after the pandemic, both the number of self-employed people and the income per self-employed person grew.
- Markets expect the European Central Bank’s key rate to climb to three percent by the middle of next year.
- Mortgage rates have gone up, but competition in this area continues.
- So far, we don’t see signs of such a slump in the real estate market, as can be seen, for example, in the Netherlands, where prices are already falling.
When we talked before the summer, you estimated that food would be the topic in the fall, because it would continue to rise in price quickly. So the September inflation didn’t even surprise you?
A little yes, although the structure of inflation in recent months is no surprise. We expected it to be perhaps a tenth lower, but it is precisely because food prices are rising rapidly and energy prices are spilling over into a wider range of goods and services faster and more intensively. if it is that inflation is slightly ahead of the expected development. In our last forecast