Inflation reaches 2.8% in 2024, it reached the most radical year-on-year slowdown in 25 years

In 2024, the growth of consumer prices was mainly influenced by food, but their price increase did not exceed 3%, while in 2023 it was above 17%. Housing and energy prices rose only very slightly, by half a percent, and were positively influenced by the lower inflation. In the previous year, 2023, they recorded a growth of more than 9%. The price increase in  2024 mainly affected miscellaneous services, e.g. food or transport, as well as alcoholic beverages with tobacco.

In total, the average value of inflation for the entire year 2024 reached 2.8%, and after two years of extremely high double-digit values, it was below the level of 3%. The pace of year-on-year price growth slowed down the most significantly in the last 25 years, year-on-year price growth reached the level of 10.5% in 2023, and in 2022 prices rose by up to 12.8%. Price growth during 2024 did not exceed 4% in a single month. The Statistical Office of the SR publishes a separate informative report on the topic of inflation for the month of December.

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During 2024, prices rose in all 12 main divisions of the consumer basket. A double-digit growth of prices above 10% was only in one division - education. At the same time, growth above 5% was experienced by three other divisions - health, alcoholic beverages with tobacco and food and beverage service activities. From the perspective of evaluating the development, it is important that there was a significant year-on-year slowdown in the rate of price growth in up to 11 divisions. Undoubtedly, the most dynamic slowdown was reflected in food and non-alcoholic beverages, in which prices for 2024 increased by an average of 2.5%, while in 2023 it was still 17.3%. The lowest growth was in the largest division, in which prices increased only slightly year-on-year, by 0.5%.

Significant impacts on price growth in 2024

The prices of food and non-alcoholic beverages, as well as housing and energy, had a significant impact on the slowdown in the growth of average annual inflation. These two items make up almost half of the expenditure structure of the SR households. However, the current increase in inflation also affected smaller items, i.,e. food and accommodation services, miscellaneous goods and services, alcoholic beverages with tobacco and transport services.

The most significant influence on the overall average year-on-year price growth was food, which had higher prices by 2.5% year-on-year. Price growth was evident in 8 out of 9 monitored food items, especially bread and cereals by 4%, followed by vegetables and fruits (both above 3%). The prices of less important food items, i.e. oils and fats, rose most dynamically by almost 9%, or sugar and confectionery by more than 5%. Only milk, cheese and eggs recorded a price drop, though a slight 0.2%. However, all 9 food items, except of fats and oils, had significantly lower price growth rates in 2024 than in 2023, when most items recorded increases of 15% to 23%.

On the contrary, price developments in housing and energy had a significantly dampening effect on the overall value of inflation. This division has the largest, up to a quarter, share in household expenses in Slovakia. Prices in this field for 2024 increased by only half a percent. A number of components of housing expenses achieved a year-on-year decrease, e.g. imputed rent by 0.8%, solid fuels by almost 5%. The important prices of electricity and gas for households remained almost unchanged, i.e. at the level of the previous year 2023. The very slight increase in the prices of this division was contributed by the increase in the price of less significant components - such as waste collection (by 15%), or the actual rent, further water and sewage, or the prices of maintenance and repairs of the dwelling.

Total inflation in 2024 was further influenced by a more than 5% price increase in the restaurants and hotels division, mainly due to price increases in restaurants and cafes (by 7.1%). Prices also increased in the field of alcoholic beverages and tobacco, while the adjustment of consumption taxes during the year brought about an increase in the price of spirits (by almost 9%) and tobacco (by 9.1%). Higher prices in miscellaneous goods and services contributed to higher inflation, including legal and administrative fees (by almost 20%), insurance (by more than 7%) and social services (by almost 7%).

Prices in the transportation division also had an impact on the development of the inflation rate in 2024 by 3.2%. The division was the only one with a faster rate of price growth in 2024 than in 2023. This was mainly influenced by a significant increase in fares for various types of passenger transport, which is why transport services achieved a price increase of up to 16.5%. However, fuels were cheaper by 1.7% year-on-year.

The most dynamic and the only double-digit growth of 10.5% in 2024 was recorded by the division of education, which experienced increase in fees for all study levels. However, this division has the smallest share in household expenses.

Development of core and net inflation

With an annual average year-on-year inflation of 2.8%, core and net inflation for 2024 reached the same value of 2.6%. Core inflation was affected by price level growth after excluding the impact of changes in regulated prices (e.g. energy prices) and other administrative measures (e.g. tax adjustments, etc.). Net inflation is core inflation excluding changes in food prices.