UPDATE 1-Slovak Aug CPI hits 2-yr high, cbank sees decline

                                
 (Adds central bank comments in paragraphs 14-15)
                                
 By Martin Santa
                                
 BRATISLAVA, Sept 10 (Reuters) - Slovakia's annual inflation
accelerated to a two-year high in August due to rising housing
costs, but analysts said price growth appeared to have peaked
and they expected a declining trend towards the end of the year.
                                
 Consumer prices rose by 0.2 percent month-on-month in
August, putting the annual headline inflation rate at 5.0
percent, the Statistics Office said on Wednesday [ID:nLA381428].
                                
 Inflation was above market expectations of flat consumer
prices on a monthly basis and a 4.7 percent rise year-on-year,
but central bank Governor Ivan Sramko said he believed price
growth has already reached its peak.
                                
 The Statistics Office said the housing category was
influenced mainly by the rise of the so-called imputed rents in
August, which reflect maintenance costs for home owners.
                                
 "There was a bigger contribution of imputed rents than we
had expected, and this drove inflation above our expectations,"
said Maria Valachyova, senior analyst at Slovenska Sporitelna.
                                
 Analysts said inflation was likely to have peaked in August,
although they saw some risks in prices of cigarettes and energy.
                                
 Valachyova said the delayed impact of an excise tax hike on
cigarettes has not yet been visible in inflation and this could
be a pro-inflationary factor in the coming months.
                                
 Furthermore, the gas monopoly SPP is seeking a 19.8 percent
increase in prices of natural gas for households, which would
boost inflation if approved by the energy market regulator.
                                
 However, the government has been trying to limit any hikes
in energy costs and leftist Prime Minister Robert Fico has
repeatedly warned western owners of utilities he may expropriate
their holdings in Slovakia if they try to overcharge people.
                                
 "If the gas price hike is approved, it is possible that
annual inflation rate will be near 5.0 percent again," said
Lubomir analyst at UniCredit Bank in Bratislava.
                                
 "If not, inflation should ease below 4.0 percent by the end
of the year," Korsnak said.
                                
 Slovak inflation has picked up in the past year, mainly due
to global rises in the cost of food and oil.
                                
 Despite accelerating price growth, Slovakia met the
inflation criterion for euro adoption and will join the single
currency area in January next year.
                                
 Speaking to journalists after a government meeting, central
bank head Sramko said price growth should not accelerate
further.
                                
 "I personally think inflation has reached its peak, and that
the future trend will be a gradual decline," he said.
                                
 Price growth in several other central European EU members is
seen slowing in the coming months due to softening pressure from
oil and food costs and easing economic growth in the region.
 (Writing by Peter Laca; editing by Chris Pizzey)