INSTANT VIEW 2-Slovak Sept CPI rises slightly above fcasts

...said on 
Thursday. 
*************************************************************** 
 
KEY POINTS: 
SLOVAK HEADLINE CPI     SEPT 07     SEPT 07 FCASTS 
  pct change mo/mo       +0.2          +0.1 
  pct change yr/yr       +2.8          +2.7 
     
(for full table please click ............ [ID:nPRG000536]) 
     
- September core inflation rate, which excludes the impact of 
changes to state-regulated prices and excise taxes, rises 0.2 
percent month-on-month, compared with the market forecast of 
+0.1 percent. 
- Housing, water, electricity, gas and other fuel prices are 
flat month-on-month in September, after 0.4 percent growth in 
August. 
- Prices of food and non-alcoholic beverages jump 1.0 percent on 
the month in September after a 0.4 percent drop in August. 
- Transportation prices, influenced mainly by oil costs, fall by 
0.1 percent on the month in September, after a 0.6 percent 
growth in August. 
     
ANALYST COMMENTS: 
    EDUARD HAGARA, ANALYST, ING BANK, BRATISLAVA 
    "Inflation was higher than we have expected ... as food 
prices rose faster. We can expect further acceleration in food 
prices but it should not endanger meeting the Maastricht 
criteria. 
    "There is not so many months left for food prices to be so 
much reflected in the 12-month average. Food prices are rising 
in other countries so the reference value (for the euro zone 
entry) should also rise." 
 
MARKET REACTION: 
- The Slovak crown was at 33.555 per euro as of 0720 GMT, 
compared with 33.580 before the data release . It 
closed at 33.599 on Wednesday. 
     
BACKGROUND: 
- Inflation data were calculated according to domestic 
methodology. 
- The central bank sets its goals according to inflation 
calculated under the EU-harmonised consumer price index as part 
of Slovakia's goal to adopt the euro in 2009. 
- The Statistics Office will release EU-norm inflation data for 
September on October 16. 
- The market followed local inflation data in the past because 
of their earlier release, but analysts have started to pay more 
attention to statistics by EU-methodology after the two figures 
began to show wider differences earlier in 2007. 
- Slovak inflation accelerated in 2005 and 2006 due to hikes in 
natural gas and heating prices for households. 
- But price growth slowed down at the start of 2007 partly due 
to the government pressure on utilities. 
- The central bank, which cut its key two-week repo rate by 25 
basis points to 4.25 percent in March and April, after a rising 
crown tightened monetary conditions and helped improve the 
inflation outlook, held interest rates steady in September. 
     
LINKS: 
- For further details on September inflation and other past 
data, Reuters 3000 Xtra users can click on the Slovak Statistics 
Office's website: 
    http://wwww.statistics.sk/webdata/english/index2_a.htm 
 
- For LIVE Slovak economic data releases, click on...... 
- Schedule of upcoming indicator releases............ 
- Summary of short-term economic data forecasts...... 
- Stories on Slovak currency moves........................[SKK/] 
- Slovak speed money guide .............................. 
- Slovak benchmark state bond prices ................. 
- Slovak forward money market rates .................... 
 

[BRATISLAVA/Reuters/Finance.cz]