We have been facing an increase in prices for several months now. Although inflation has been rising year-on-year for the fifteenth month in a row, prices have been rising, especially in recent weeks. The reason is the war in Ukraine, which dealt another severe blow to the economy. Rising prices and our willingness to buy are also pushing up inflation, which is breaking records. Year-on-year inflation is the highest since June 2000. Due to rising prices, the coalition is proposing an anti-inflation package, which it cannot agree on. VIDEO Fuel prices are rising, the state should definitely do something about the prices, the state’s discussion with Slovnaft is important Households will pay extra again in almost all segments other items monitored by the Statistical Office of the Slovak Republic. More than half of the twelve expenditure groups of households achieved year-on-year growth of more than 7%. Compared to March, prices rose by 1.5% in April, and although the current growth rate was slower, it is higher in the long run. At the beginning of the war, inflation was 9%. It is currently at almost 12%. Photo gallery (15) Source: Statistical Office of the Slovak Republic Analysts are currently inclined to believe that this year’s inflation will be relatively high, at around 10%. “Although there are concerns about an even higher level. Slovaks will certainly pay extra in the coming months for food, fuel, energy, but also for building materials. , “said Eva Sadovská, an analyst at Wood & Company. Meat, bread and oil prices rose the most The month-on-month rise in food prices rose by a total of 2.6%. Meat (by 5.6%), bread and cereals (both by 2.3%) and milk, cheese, eggs (by 2%) increased the most. Compared to the development in previous months, the growth of vegetable prices slowed down to 2.9%. However, prices of oils and fats grew faster by 3.3%, of which butter by 3.5%. Sellers in stores warn that the price of two-liter oil will be around 10 euros. Only fruit prices fell by 0.9%. With regard to housing and energy, of these, imputed rents in particular (taking into account the cost of own housing) increased by 2.3% month-on-month. Higher prices were also maintained for various housing-related services. From energy, prices for solid fuels grew by 1.4%. We are sensitive to higher prices Food and housing are the areas that Slovaks spend the most of their family budgets. “Food cuts them about a fifth of their costs, and housing is even a quarter of total consumer spending. That’s why consumers are more sensitive to their higher prices. The pace of price increases accelerated in April in both food and non-alcoholic beverages and housing. , “comments Sadovská. Thanks to their large representation in the consumer basket, both of these areas have significantly contributed to the overall increase and acceleration of consumer prices. More petrol and diesel again From the transport department, the overall month-on-month rise in prices was mainly due to more expensive fuels by 3.5%, and the purchase of means of transport by one percent. Year-on-year, fuel prices rose by 31.2%. Currently, fuel prices are around 1.8 euros per liter. “The increase in the prices of oil, energy and many key agro-commodities on world markets is evident and this is reflected in the prices of fuel at gas stations and also in the price tags of goods on the shelves in our stores,” says Sadovská. Photo gallery (15) Source: Getty Images As prices rise, the government is also considering capping gasoline and diesel prices. However, many experts do not consider this a happy solution. “Price capping can give drivers (and voters) the illusion that prices are not rising. But it will not change the fact that oil prices have risen in the world, that there is a war in Europe and that there is an embargo on Russian oil in the air. Price capping will make prices less visible. failures in the production and supply chain, “INESS analyst Martin Vlachynský told Topky. “Vendors, transporters, storers and producers of petroleum products will have fewer resources for (very important today) investments, later there will be problems with operating costs and in the end there may be the closure of some gas stations or even fuel for rations. However, the biggest danger of this idea is in its contagion – over time, the government may be challenged to regulate food, building materials … and we will end up with an allotment economy, “he added. Conflict over the anti-inflation package Due to the increase in prices, the government decided to prepare an anti-inflation package. The problem, however, is that although a package agreement was supposed to be reached on the coalition council, no proposal was made for Wednesday’s meeting. According to some coalition politicians, the whole package is currently to stand on SaS. Finance Minister Igor Matovic gave the Liberals a week to discuss. The dispute is mainly over three parts of the package – a tax bonus, higher child allowances, which is one of the key elements of the package, and leisure vouchers for children. Although the Liberals do not agree with the tax bonus, they will not veto it and, according to Sulík, they never wanted to. They consider the proposal to be bad and unfair and, in particular, do not like the fact that it is to be financed by cutting local governments’ budgets. The tax bonus would pass to the government, but in parliament the coalition would need opposition votes. However, what SaS will veto will be child allowances and leisure vouchers. Richard Sulík is not against the expenditures themselves, but against the fact that existing taxes should be increased as a result. For liberals, raising taxes is a “red line”. However, the red line also exists for Igor Matovič. For OĽANO, it is a fact that families with children are left behind and thrown overboard if the SaS vetoed part of the package, thus blocking it. Photo gallery (15) Photo gallery (15) Photo gallery (15) Photo gallery (15) Photo gallery (15) Photo gallery (15) Source: Statistical Office of the Slovak Republic Prices of the most important household items increased by double digits Last year, inflation was at around two percent, this year it is at 12%. “Rising prices in all 12 monitored branches contributed to its increase. The prices of the two most important expenditure items of Slovak households, ie food and housing costs, were higher by double-digit values on a year-on-year basis,” states the Statistical Office. Food prices rose by 14.3% year on year in all nine monitored items. In year-on-year comparison, higher prices of bread and cereals (by 16.4%), oils and fats (by 29.8%) and vegetables (by 26.2%) had the greatest impact on inflation. “Among the items that have a significant share in household expenditure, the current figures also included more expensive milk, cheese and eggs by 13%, as well as meat by 12%. Prices for coffee, tea and cocoa and mineral water increased for non-alcoholic beverages. , soft drinks and juices, “the office adds. Photo gallery (15) Photo gallery (15) Photo gallery (15) Photo gallery (15) Photo gallery (15) Photo gallery (15) Source: Statistical Office of the Slovak Republic In practice we will pay almost 15 euros more “In practice, this means that while in April 2021 Slovaks and Slovaks bought food for 100 euros, in April 2022 it was almost 114 euros, while they had the same goods in baskets or carts, “Sadovská explained. There are several reasons why food is more expensive. Producers cite more expensive energy needed for production as one of the reasons. “Another reason is the high price of oil and, consequently, fuel. Food must not only be produced but also transported to shops. The weather factor, which has an impact on crops – of plant origin, is always important in food prices,” the analyst states. This in turn affects animal husbandry. The state of the harvest is always reflected in the development of agro-commodity prices on stock exchanges, and sooner or later it will also be reflected on price tags in shops. “Traders also point out the higher costs associated with ensuring hygiene and safety measures. Food producers, in turn, also experience higher costs due to greening production, the introduction of new technologies or more expensive packaging materials,” she said. began to speak more than a year ago, added in recent months a war conflict in Ukraine. Housing costs higher by almost 16%! The highest share in the expenditures of Slovak households is represented by housing costs, while their growth was at the level of 15.7% in April. Year-on-year growth increased both in imputed rents (currently up by 19.7%) and in housing-related services (maintenance and repair of dwellings by 19.2%). For energy (electricity and gas), the impact of price adjustments within the regulated network industries of January is still felt. In April, households also paid extra for thermal energy and solid fuels. Compared to April 2021, we also paid extra for meals in restaurants and cafes by 11.7%, costs for personal care by 8.7% or for outpatient services 7.1%. “In summary for the four months of 2022, consumer prices increased on average by 9.9% year-on-year (for households of employees, for low-income households by 9.8%, for households of pensioners by 10.7%),” adds the Statistical Office of the Slovak Republic. The price increase will be felt by all Slovaks, salaries will grow more slowly We will all experience the increase in prices, as these are relatively sharp and obvious changes. “We expect that the salaries of Slovaks and Slovaks will grow more slowly than prices this year. In practice, this means that most employees should afford less goods and services on average than this year’s salaries than last year,” Sadovská said. However, the increase in prices will be more pronounced for senior households, low-income households, unemployed households, single-parent households with children, households with several children, but last but not least, households with handicapped members. So a rapid increase in prices is certainly not good news for our wallets. High inflation not only weakens real wage growth, but also devalues household savings on bank accounts. “As bank accounts bear zero interest and deposits barely one percent on average. Inflation has been rolling interest on bank deposits for the sixth year in a row (including 2022). During the previous 5 years, inflation in Slovakia has always exceeded the level of interest rates than at current In 2022, this will not be the case, as expected inflation will reliably exceed interest rates on bank accounts or deposits, “the analyst added, adding that one of the ways in which inflation can be managed in the long run is investing.
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