Slovak inflation hits 20-mo high, peak in sight

                                
 * EU-norm inflation at 20-month high
                                
 * Inflation seen peaking in August or September
                                
 * Slovak rates seen flat as ECB likely to tighten
                                
 
                                
 By Martin Santa
                                
 BRATISLAVA, June 16 (Reuters) - Slovakia's annual inflation
hit a 20-month high in May on a food price jump, data showed on
Monday, but analysts see price growth peaking by autumn.
                                
 EU-norm consumer prices rose by 0.4 percent on the month,
putting the annual inflation rate at 4.0 percent, the Statistics
Office said. Inflation was 0.3 percent on the month and 3.7
percent on the year in April.
                                
 Analysts expected prices in Slovakia, which is set to join
the euro zone on January 1, to rise 0.2 percent on the month and
3.9 percent on an annual basis in May [ID:nL16527584].
                                
 "It was in line with local inflation data with the biggest
rise seen in food prices," said Tatra Banka analyst Juraj
Valachy.
                                
 Inflation, calculated by a local methodology, was 4.6
percent in May, data showed last week. The central bank is
targeting EU-norm figures.
                                
 Food and non-alcoholic beverages rose by 1.0 percent on the
month, a slightly slower pace than in April. The item was up 8.4
percent on the year.
                                
 Analysts saw no major demand-led inflation risks building up
as the firming crown currency has tightened monetary conditions.
But record high oil prices still posed a risk.
                                
 "Inflation should peak at around 4.4 percent in August or
September," said Maria Valachyova, senior analyst at Slovenska
Sporitelna. "It should ease to 3.5 percent by December due to
positive annual base effects in food prices.
                                
 The crown has gained 10 percent against the euro since
January, boosted by expectations of a strong conversion rate
ahead of euro adoption.
                                
 The unit showed no reaction to the release, trading at
30.282 per euro <EURSKK=> as of 0918 GMT, compared with Friday's
close of 30.300 against the euro.
                                
 Analysts saw no implications from the figures for the
central bank's policy settings.
                                
 "We expect that the European Central Bank could hike its key
interest rates by 25 basis points in the near term (to 4.25
percent) ... thus the Slovak central bank will not need to cut
rates," said Lubomir Korsnak, analyst at UniCredit in
Bratislava.
                                
 The Slovak central bank has left its key two-week repo rate
flat at 4.25 percent for 13 months. The bank will comment on May
inflation data and its June forecast later on Monday.
  For details on May inflation data please click on
[ID:nL16527584]