Inflation Report - III/2010

At its meeting on 12 August 2010, the Bank Board of the Czech National Bank approved this year’s third Inflation Report. This Report, which is one of the core elements of the central bank’s communication with the public in the inflation-targeting regime, has been redesigned in an effort to make the Report more reader-friendly and to enhance the transparency of the CNB’s decision-making process.

Some changes in content have been introduced in this Inflation Report. First, the order of the sections is different. In line with the principles of modern communication, the Report describes first the CNB forecast in section II and then current economic developments in section III. Second, the description of the forecast in section II is more detailed. Among other things, it has been enriched with a detailed comparison of the new forecast with the previous one. Greater emphasis is also placed on the CNB forecast in the Summary of the Report, i.e. in section I. Third, the individual parts of section III have been rearranged and their analytical coverage has been extended. All these changes are aimed at making the Report more reader-friendly and at further enhancing the transparency of the CNB’s decisionmaking process. Together with these changes, the Inflation Report has been merged with a non-public document called the Situation Report on Economic and Monetary Developments to form a single document that is discussed by the Bank Board and serves as a fundamental input for its monetary policy decisions. The published Inflation Report is concurrently a subset of the merged document, covering more than 90% of its content. The public can now thus also learn, for example, about the sensitivity scenarios, which describe and quantify the risks to the baseline scenario of the forecast and which could have influenced the Bank Board’s monetary policy decision. The full internal document will be published with a lag of six years, as before.

The discontinuation of the hard-copy version of the Inflation Report and the aforementioned changes in content have led to a reassessment of the extent of the additions and annexes to the Report. Starting with this Report, the minutes of the Bank Board meeting will no longer be included and will only be available on the CNB website. For the same reason, the number of statistical tables annexed to the Report has been reduced significantly. From now on, only a table of key macroeconomic indicators will be published. The overwhelming majority of the data from the discontinued statistical tables remains available to the public through the ARAD time series system accessible from the CNB website.

This Inflation Report was approved by the CNB Bank Board on 12 August 2010 and contains the information available as of 23 July 2010.