Inflation Slows but Remains Close to the ČNB Upper Limit
In figures released by the Czech National Bank, inflation in June exceeds forecasts and shows significant increases in food and housing. The year-on-year increase was 2.7%, which is still significantly above the bank’s target of 2%. Photo credit: Zenon Moreau.
Brno / Czech Rep., Jul 15 (BD) – In June, consumer prices increased 2.7% year-on-year (yoy); this was slightly lower (-0.2%) than in May.
There were significant yoy increases in beer (+5.4%) vegetables (+22.7%), meat (+3.9%) and bakery products (+3.2%). These, however, were increasing at a slightly slower rate than in May. According to Czech Fund analyst Lukáš Kovanda in E15 the increases in potatoes, which are at an all-time high of 27 crowns per kilo, and beer are attributable to the drought last year.
There were also notable increases in housing: rents +3.9%, electricity +10.4%, gas +3.6% and water and sewage +2.6%. Miscellaneous goods showed increases in insurance of 3.9% and financial services 5.9%.
The main areas where there were actually decreases were clothing and footwear, which saw a drop of 3.1% and communications, which fell 1.3%.
Overall, the inflation figure (the average consumer price index for the previous 12 months) was 2.5%.
Eurostat has issued harmonised consumer prices numbers for May and these show an increase of 1.6%. Under this measure, the index for the Czech Republic rose 2.6%. Although not as bad as Hungary (+4.0%) and Slovakia (+2.7%), it is worse than the other neighbouring countries: Germany (+1.3%), Poland (+2.2%).
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