* WHAT: April EU-norm inflation, May interest rate decision
* WHEN: May 15, May 27
* Inflation seen at 3.6 percent, rates seen flat
By Martin Santa
BRATISLAVA, May 6 (Reuters) - Slovakia's April annual
inflation rate probably matched a 15-month high from the
previous month, a Reuters poll showed on Tuesday, but analysts
saw price growth accelerating further in the coming months.
The poll of 12-analysts also said interest rates should stay
on hold in May because Slovakia will have to align its borrowing
costs with the euro zone as part of the euro adoption process.
The European Commission is expected to give Slovakia the
green light to become the 16th member of the euro zone next year
in a report the EU's executive arm will publish on Wednesday.
The median forecast in the Reuters poll put the annual
EU-norm inflation rate at 3.6 percent for April, the same level
as in March. Monthly consumer price growth was seen at 0.2
percent, after a 0.3 percent rise in the previous month.
"There is no change in the inflation scenario compared with
recent months," said Miroslav Plojhar, an analyst with JP Morgan
in London. "Food and oil prices remain key drivers, but there
are no excessive increases or declines."
Plojhar and other analysts expected Slovak inflation to pick
up speed further later this year. Eduard Hagara, an ING Bank
economist in Bratislava, said the annual inflation rate could
rise as high as 4.3 percent by September.
Slovakia has already met all numerical conditions for euro
zone entry. The 12-month average annual inflation rate,
calculated to March, was 2.2 percent, a full percentage point
below the threshold for euro adoption.
European Commission forecasts showed last week that Slovak
inflation should stay under the reference value for euro
adoption both this year and in 2009, boosting market confidence
that Bratislava will get a green light to adopt the euro.
The central bank has said factors driving inflation are
outside the influence of its monetary policy, adding there are
no major demand-led pressures in the fast growing economy.
Some analysts, however, saw signs of upward pressure on
prices stemming from strong consumer spending.
"Under normal circumstances, inflation would point towards
higher interest rates," said ING's Hagara. "But, because we are
heading to the euro zone, we will have to align rates with the
euro zone interest rates," he added.
The key two-week rate is expected to stay flat at 4.25
percent in April for the 13th consecutive month, which would
preserve a 25 basis points premium over the euro zone benchmark.
Most analysts expect Slovakia to adjust its rates with the
euro zone in the second half of the year after the crown's
conversion rate for euro adoption is agreed.
(For accompanying table please click on [])
