Prague, May 13 - Food and fuel pushed consumer prices higher in emerging Europe in April, but analysts said the region's central banks could end their tightening cycle by mid-summer as the global slowdown takes hold on growth.
Data from Slovakia on Tuesday showed food prices, up more than 40 percent in the last year causing shortages, hoarding and riots in some developing countries outside Europe, were driving overall inflation.
The same message came recently from figures released in the Czech Republic, Romania and the Baltic states.
The costs of oil dominated sectors like transportation and heating also weighed in, but analysts said annual price growth should ease overall due to a high base effect from 2007.
The Slovak data showed consumer prices there rose by 0.2 percent month-on-month in April, for annual inflation rate at 4.3 percent. It was broadly in line with market expectations, but analysts said risks were on the upside.
"Food and fuel prices remain the key risks. The inflation peak is still ahead of us. I think we will see it in the summer," Silvia Cechovicova, an analyst at CSOB in Bratislava, said of the Slovak numbers.
The Slovak data followed April figures from the neighbouring Czechs, who saw year on year inflation slow to 6.8 percent, from 7.1 percent in March. But natural gas and food costs pushed the monthly figure a touch above expectations to 0.4 percent.
INFLATION VS. GROWTH
Central and Eastern Europe's policymakers are trying to tame rampant consumer consumption and demands for large wage hikes, fuelled by jumps in consumer prices, even as growth slows.
Accompanying the slightly faster-than-expected Czech inflation data on Monday were industrial output numbers showing a 2.1 percent decline in March -- the first fall in five years.
That mirrored equally disappointing production and export data from Slovakia, Hungary and Poland, which all showed a drop in sales to the euro zone, the region's main export customer.
Economists expect first quarter growth data for the Czechs, Slovaks and Hungarians due out on Thursday to show that impact, which will be compounded by the effects of high inflation on real wages and consumer confidence.
Simon Quijano Evans, an economist at Unicredit MIB, said the inflation trend will keep banks hawkish through June and July.
But then tightening will end, particularly because a spike in food costs and administrative price hikes in the second half of last year will start to wear off on annual inflation figures.
"Inflation will start to move on the downside, and because growth is being hit in most of the countries, you'll have another reason not to hike rates," Quijano-Evans said.
For Poland, due to issue April inflation on Wednesday, analysts expect price growth to ease a notch to 4.0 percent, from 4.1 percent in March, but to stay well above the central bank's 2.5 percent target.
The market expects Poland's rate setting Monetary Policy Council to hike by 25 basis points to 6.25 percent in June, but that country is also expecting growth to slow.
The Hungarians -- also issuing their April data on Wednesday -- are expected to hike from 8.25 percent at present as well.