Flash inflation for December shows slight increases, except for Slovakia

In the Eurozone, annual inflation is expected to be 2.4% in December 2024, up from 2.2% in November. Looking at the main components, services are expected to have the highest annual rate in December (4.0%, compared with 3.9% in November), followed by food, alcohol & tobacco (2.7%, stable compared with November). Finally, energy prices grew 0.1% y/y compared with a decline of -2.0% in November. In the region, there are four countries that currently publish a flash inflation estimate. In Czechia, Poland, and Slovenia, inflation rates increased at the end of the year a development that was anticipated due to statistical effects. In Croatia, Decembers inflation landed at 3.4% y/y (up from 2.8%). In Poland, inflation increased marginally to 4.8% y/y, below market expectations, while in Slovenia, it picked up to 1.9% y/y. In Slovakia (HICP flash estimate), the inflation rate surprisingly slowed from 3.6% y/y in November to 3.1% y/y in December due to a year-on-year moderation in the growth of food prices, including alcohol and tobacco, and a sharp month-on-month decline of more than 2% in the same category (food, including alcohol and tobacco). At the month-on-month basis, this is the most significant decline ever (since February 1996). Local factors such as the decline of VAT for food items helped push food prices down. Finally, Czechia will be releasing flash inflation estimates as of February 2025.