MONTHLY ACCOUNT: Massive price increases will hit people hard. We looked where prices are rising everywhere – TVNOVINY.sk

Slovakia is experiencing a huge wave of rising prices. Prices are rising in almost every segment, sometimes by several tens of percent compared to last year. Inflation thus jumped to ten-year highs.

“On a year-on-year basis, prices rose by as much as 4.6 percent, which represents a further acceleration in the rate of rise compared to previous months. At the same time, inflation has reached its maximum since November 2011, “said Eva Sadovská, an analyst at WOOD & Company.

Almost all of the food prices became more expensive

There are several reasons why food is more expensive. The key is the weather, whose fluctuations also negatively affect the price of final products. Prices are also affected by fuels, which are also more expensive; in the case of meat, the price is still affected by the African swine fever or bird flu.

“A pandemic also plays a big role. It affected individual economies in different ways during the first and second waves. A common indicator not only of the more affected countries was the problem of the labor force. Restrictions at the borders caused a shortage of labor from abroad, but there could also be a problem with the labor force in the country to spread the disease, “Sadovská added.

Slovak food producers and traders also point out higher overtime pay and weekend work or a higher minimum wage. At the same time, traders point out the higher costs associated with providing hygiene and safety measures.

“Undoubtedly, the announced higher energy prices will also affect them in the coming months,” Sadovská added.

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Gasoline and diesel prices are also rising rapidly

Significant price increases also affected non-food goods. In this area, the price of fuels grew the most year-on-year, growing at an average rate of 25 percent. In practice, this means that we pay about 1.45 euros per liter of petrol.

“The average price of 1.5 euros per liter should fall in the next two weeks, as the gradual rise in oil prices does not end,” said Boris Tomčiak, a commodity analyst at Finlord investment company.

The price increase will not stop here either, but it should not be so significant.

“However, I do not think that the limit of 1.6 euros per liter will be exceeded. There is already a lot of pressure on the OPEC cartel to significantly increase oil production and thus stabilize its price in the range of $ 80 to $ 90 per barrel, “added Tomčiak.

It should be underlined that these are average prices. These vary from region to region, but also between individual service station networks. Already in more developed regions, petrol stations sell liters of petrol for more than 1.5 euros.

Compared to last year, when drivers, on the other hand, enjoyed lower fuel prices and fell historical records, the price of gasoline rose by almost 40 cents per liter.

In recalculation, this means that in May 2020 you refueled 50 liters of petrol (average tank volume) for less than 54 euros, currently you pay more than 72 euros. We focused more on this topic HERE.

In addition to fuel, the price of cigarettes and printing also increased at a double-digit rate.

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School canteens became the most expensive

The price increase did not bypass the services either. Unlike last year, eating in school (canteen) canteens and canteens is almost a third more expensive.

“Year-on-year, prices of restaurants and hotels rose the most (by 11.8%), due to changes in the financing of lunches in primary schools. Prices in company canteens thus increased by almost a third year-on-year, “Sadovská explained.

In addition, the services that people commonly use have increased significantly. The only thing that will please are the prices of tickets, which fell by almost half.

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More expensive electricity and gas

To make matters worse, people also pay extra for electricity and gas. According to calculations, the average household should prepare three to four euros more per month for electricity. In the case of gas, the price increases depending on whether people only cook on it or also heat it.

If they only vary, on average the monthly bill should not be more than 50 cents higher. If he also heats it, it will be about six euros a month. Together, the average family pays about 10 euros more for electricity and gas, and an extra 120 euros a year.

Summa summary. After adding up all the costs of everyday life, a massive increase in prices will cause households to raise their monthly expenses by several tens of euros.

Forecasts are not rosy

Despite the fact that prices have been rising for several months in a row, this trend will not stop yet. It can even speed up.

“We expect that inflation in our country will continue to be high in the coming months and will grow at a rate of around four to five percent,” said 365 bank analyst Jana Glasová. According to her, higher prices of production inputs, building materials, petrol, agro-commodities and food should push upwards.

VUB analyst Michal Lehuta has even higher expectations. According to him, inflation should continue to rise, especially in January, when new prices for regulated energy, such as heat, electricity and gas, enter into force.

“Price growth in the Slovak Republic could reach its maximum in April around the level of 6.0 – 6.5%. This will be the highest inflation since 2004, “Lehuta specified.

Analysts of the National Bank of Slovakia also expect a double-digit increase in consumer prices of gas and other energy in January.