The CNB comments on the August 2013 inflation figures
Inflation comes in below the CNB forecast in August
According to figures released today, the price level increased by 1.3% year on year in August 2013. Annual headline inflation thus slowed somewhat compared to July. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also slowed in August, to 0.5%. This means it was below the lower boundary of the tolerance band around the CNB’s target.
Annual headline inflation was 0.3 percentage point lower in August than the CNB’s current forecast. The lower-than-forecasted annual inflation in August was due mainly to administered prices as a result of an unexpected decrease in gas prices for households in July. In August, slight downward deviations from the forecast were also observed for adjusted inflation excluding fuels, for the first-round effects of indirect tax changes and for food prices. Fuel prices declined more moderately in year-on-year terms in August than the CNB had expected.
The published data confirm the message of the CNB’s current forecast regarding the persisting anti-inflationary effect of the domestic economy. According to the forecast, the sources of inflation are still food prices, administered prices and indirect tax changes. However, growth in food prices should moderate. Import prices are inflationary owing to depreciation of the koruna. The CNB’s forecast expects headline inflation to be below the CNB’s 2% target this year despite the substantial impact of tax changes. Monetary-policy relevant inflation will be below the lower boundary of the tolerance band this year and then return slowly towards the target at the monetary policy horizon.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the August 2013 inflation figures
Inflation comes in below the CNB forecast in August
According to figures released today, the price level increased by 1.3% year on year in August 2013. Annual headline inflation thus slowed somewhat compared to July. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also slowed in August, to 0.5%. This means it was below the lower boundary of the tolerance band around the CNB’s target.
Annual headline inflation was 0.3 percentage point lower in August than the CNB’s current forecast. The lower-than-forecasted annual inflation in August was due mainly to administered prices as a result of an unexpected decrease in gas prices for households in July. In August, slight downward deviations from the forecast were also observed for adjusted inflation excluding fuels, for the first-round effects of indirect tax changes and for food prices. Fuel prices declined more moderately in year-on-year terms in August than the CNB had expected.
The published data confirm the message of the CNB’s current forecast regarding the persisting anti-inflationary effect of the domestic economy. According to the forecast, the sources of inflation are still food prices, administered prices and indirect tax changes. However, growth in food prices should moderate. Import prices are inflationary owing to depreciation of the koruna. The CNB’s forecast expects headline inflation to be below the CNB’s 2% target this year despite the substantial impact of tax changes. Monetary-policy relevant inflation will be below the lower boundary of the tolerance band this year and then return slowly towards the target at the monetary policy horizon.
Tomáš Holub, Executive Director, Monetary and Statistics Department