BRATISLAVA, April 14 (Reuters) - Slovakia's annual inflation rate fell for the sixth consecutive month to a 19-month low in March, data showed on Tuesday, and analysts saw further easing as the country headed towards its first recession. Slovak consumer prices fell by 0.2 percent month-on-month in March, putting the annual headline inflation rate at 2.6 percent, its lowest reading since August 2007, the Statistics Office said [ID:nLE357436].
"It is much better than expectations, the year-on-year inflation dynamics is slowing faster than expected," said CSOB Bank analyst Silvia Cechovicova.
"There were two key factors behind it; a drop in prices of food and the transportation category, in which prices of cars went down," she added.
Prices of food and non-alcoholic beverages fell by 0.8 percent on the month in March, after a 0.3 percent growth in February, and transportation costs dropped by 1.3 percent on the month in March after a 0.4 percent fall in the previous month.
Analysts forecast inflation to slow further in the coming months and saw the annual rate falling below 2 percent by the autumn.
Slovak price growth has been slowing since September, mirroring global inflation trends, due to cooling economic activity and lower cost of oil and food.
Slovakia, which adopted the euro in January, expects its first economic contraction ever this year as it suffers from fading demand for its key exports, cars and TV sets. The central bank forecasts annual contraction of 2.4 percent in 2009.
"Recession in the euro zone is tightening purchasing power of people, which is transferred into a drop of demand-led inflation," said Maria Valachyova, senior analyst at Slovenska Sporitelna bank in Bratislava.
"Also, weakening of neighbouring currencies against the euro makes imported goods cheaper, and creates a competitive pressure on local retailers," she said. (Reporting by Martin Santa; editing by Chris Pizzey)