* Forecasts 0.2 pct inflation in 2014 vs 0.6 pct previously
* Prices fell in Feb, but deflation not seen
* Bank lifts 2014 growth forecast a tad to 2.4 pct
BRATISLAVA, March 25 Slovakia's central bank
slashed its inflation outlook on Tuesday after prices fell last
month, predicting average inflation this year would be barely
Like some other euro zone members, Slovakia has seen
inflation pressures evaporate and prices dipped 0.1 percent
year-on-year in February, as measured by both domestic and
In its quarterly outlook, the bank cut its full-year
inflation forecast to 0.2 percent from a previous 0.6 percent.
It said that the probability of deflation, defined as a
price fall lasting one year, was 20-25 percent between the
second quarter of this year and the first quarter of 2015.
The central bank raised its economic growth forecast
slightly for this year, by 0.1 percentage point to 2.4 percent,
and kept its 2015 forecast at 3.3 percent.
Deflation would be bad for the economy as it would deter
consumer spending as people waited for prices to fall further.
Slovakia joined the euro zone in 2009. Last month, it became
the third country in the currency bloc to record a year-on-year
price fall, adding to debate over whether the European Central
Bank (ECB) needs to take additional steps to loosen monetary
policy and spur inflation.
Germany's Bundesbank said on Tuesday that the ECB could buy
loans and other assets from banks to lift the euro zone economy,
marking a radical softening of its stance on the contested
Jozef Makuch, Slovakia's central bank head and an ECB
governing council member, said on Tuesday that deflation risks
in the euro zone had risen and a number of European Central Bank
governing council members were prepared to take decisive steps
(Reporting by Robert Muller, writing by Jan Lopatka; Editing by