Slovak inflation rate expected to fall in June
Slovakia's inflation rate, the highest level in European Union, is expected to fall in June as Slovakian currency Koruna strengthened, oil prices dropped and the impact of higher taxes and utility prices reduced.
Inflation in
Slovakia increased after the government raised prices of gas, rents and utilities in 2003 and January 2004. Surging global oil prices also affected the inflation negatively.
However, it is stated that the strengthening of Koruna and declining oil prices are helping the central bank to meet its inflation target.
The government expects the country, which joined the EU on May 1, to enter the new investment projects, due to increased demand for Koruna.
The Koruna showed increase after foreigners bought the currency to pay for exports such as Volkswagen AG automobiles and
US Steel Corp products produced in
Slovakia.
The central bank forecasts inflation rate to be around 4% by June 2005 and 2.4% in 2007, if the rise in Koruna continued.