The CNB comments on the May 2010 inflation figures
Inflation still slightly above the CNB forecast
According to figures released today, the price level increased by 1.2% year on year in May 2010. Inflation is thus in the lower half of the CNB´ s tolerance band of the inflation target around 2%. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, was 0.1% in May 2010.
Annual headline inflation was 0.3 percentage point higher in May 2010 than the CNB’ s current forecast. Though the central bank forecasted a moderate pick-up in annual CPI inflation in Q2 this year, in reality it was somewhat more striking. This deviation of the actual figure from the May forecast was, to a large extent, already given by the development in April this year. This is due mainly to higher-than-expected growth in fuel prices reflecting world oil and petrol prices on European stock exchanges. Regulated prices were also higher than forecasted. The forecast for the effects of indirect tax changes, food prices and adjusted inflation excluding fuels proved to be accurate. Adjusted inflation excluding fuels is still markedly negative in year-on-year terms, reflecting thus the current anti-inflationary effect of import prices and subdued inflationary pressures from the domestic economy.
The deviation of actual inflation from the CNB´ s forecast remains modest and in addition it concerns a limited number of the consumer basket items with generally volatile prices, and so no doubt is cast on the forecast in general by figures released today. Headline inflation will continue to gradually rise this year up to slightly above the CNB´ s target of 2%, which it will exceed over the short term owing, among other thins, to the effect of indirect tax changes. In 20101, inflation will fall slightly below the target. Monetary-policy relevant inflation will be below headline inflation at first, and at the monetary policy inflation it will approach the target from below.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the May 2010 inflation figures
Inflation still slightly above the CNB forecast
According to figures released today, the price level increased by 1.2% year on year in May 2010. Inflation is thus in the lower half of the CNB´ s tolerance band of the inflation target around 2%. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, was 0.1% in May 2010.
Annual headline inflation was 0.3 percentage point higher in May 2010 than the CNB’ s current forecast. Though the central bank forecasted a moderate pick-up in annual CPI inflation in Q2 this year, in reality it was somewhat more striking. This deviation of the actual figure from the May forecast was, to a large extent, already given by the development in April this year. This is due mainly to higher-than-expected growth in fuel prices reflecting world oil and petrol prices on European stock exchanges. Regulated prices were also higher than forecasted. The forecast for the effects of indirect tax changes, food prices and adjusted inflation excluding fuels proved to be accurate. Adjusted inflation excluding fuels is still markedly negative in year-on-year terms, reflecting thus the current anti-inflationary effect of import prices and subdued inflationary pressures from the domestic economy.
The deviation of actual inflation from the CNB´ s forecast remains modest and in addition it concerns a limited number of the consumer basket items with generally volatile prices, and so no doubt is cast on the forecast in general by figures released today. Headline inflation will continue to gradually rise this year up to slightly above the CNB´ s target of 2%, which it will exceed over the short term owing, among other thins, to the effect of indirect tax changes. In 20101, inflation will fall slightly below the target. Monetary-policy relevant inflation will be below headline inflation at first, and at the monetary policy inflation it will approach the target from below.
Tomáš Holub, Executive Director, Monetary and Statistics Department