Pre-Christmas shopping caused the most dynamic month-on-month drop in prices in eight and a half years 

After a long time, the last month of the year brought a significant reduction in the prices of food, soft drinks and alcohol. Year-on-year price growth slowed again to below 3%. Among the 12 divisions, education, followed by restaurants and hotels as well as health had the most dynamic price growth in the year-on-year comparison within the consumer basket above the level of 5%.

Consumer prices of goods and services dropped by 0.4% month-on-month in December, which was the most significant month-on-month drop in eight and a half years (since July 2016). Such a sharp monthly drop in prices is a record for the past 27 years and has occurred only four times. The pace of annual inflation slowed to 2.9%, in October and November it was still above 3%.

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Month-on-month development – December 2024 compared to November 2024

In December, compared to November, consumer prices decreased by a total of 0.4%. Prices dropped in only 2 out of a total of 12 divisions (household expenditure groups), but that was enough for the overall average drop.  It was a decrease by 2.4% in the food and non-alcoholic beverages division and by 1% in the alcoholic beverages and tobacco division Price growth was reflected in a total of 6 divisions, but only in a small range, from 0.1% in the housing and energy division to 1.3% in the recreation and culture division.

A major impact on the higher price drop after a longer period of time was the reduction of food prices¹⁾, as part of the pre-Christmas and end-of-the-year competition between retailers. The price of all 9 monitored food items decreased significantly month-on-month, namely fruit by 7.6%, vegetables by 5%, oils and fats by 3.8%, meat by 1.5%, milk, cheese and eggs by 1. 4%. The prices of non-alcoholic beverages¹⁾ were also lower, by 2.4% due to cheaper mineral waters as well as coffee, tea and cocoa. Alcoholic beverages, especially beer and spirits, but also wine, which were cheaper by 1.9%, had a positive impact on the overall decline in prices in December.

On the contrary, prices rose month-on-month in the transportation division by 0.2% due to more expensive fuels by 0.7%.

Price growth continued at the month-on-month level for newspapers and periodicals, catering, pharmaceutical products, personal care, hairdressing services, household appliances, household maintenance goods and services, insurance related to transport, clothing, audio equipment, holiday tours.

Year-on-year development - December 2024 compared to December 2023

The prices of goods and services reached a lower level of growth in December, namely 2.9% in a year-on-year comparison. Year-on-year prices were higher in all 12 divisions (household expenditure groups), namely from 1.1% in the housing and energy division to 10% in the education division.

Long-term higher prices in the food and soft drinks division have the most significant influence on the development of inflation, in December 2024 they were higher by 2.4%.

We continued to pay extra for education, especially pre-primary and primary education, for medical products and supplies, outpatient and hospital services, alcoholic beverages, but also for catering and accommodation services, or newspapers, books and office supplies.

In the transportation division, prices were higher by 3.5% year-on-year, while even lower fuel prices by 1.5% could not outweigh the 17% higher prices of transportation services, which recorded double-digit increases throughout the year.

In total for the year 2024, consumer prices increased by 2.8% on average year-on-year. The Statistical Office of the SR publishes a separate informative report on average annual inflation in 2024.

Development of core and net inflation

In December the year-on-year inflation rate was 2.9%, core inflation reached 2.3% and net inflation reached 2.2%. Month-on-month core inflation reached -0.5% and net inflation reached 0.1%.

Core inflation tracks 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.