The CNB comments on the June 2011 inflation figures
Inflation comes in slightly above CNB forecast in June 2011
According to figures released today, the price level increased by 1.8% year on year in June 2011. Annual headline inflation thus decreased from 2% in May. The annual rate of monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also declined to 1.8% in June and remains just below the inflation target.
Annual headline inflation was 0.1 percentage point higher in June 2011 than the CNB’s current forecast. Slightly higher-than-forecasted growth was recorded for food prices and administered prices. Food prices have been very volatile in recent months: higher-than-expected price growth occurred in May mainly as a result of a jump in bread prices, but this deviation was largely offset in June by untypical movements in prices of vegetables and potatoes. In June, administered prices reflected an increase in the administered price of gas for households, which had been forecasted to appear in inflation already in April. The slightly higher-than-forecasted inflation was also due to adjusted inflation excluding fuels, which, however, remains negative. By contrast, fuel prices, which responded to a previous decline in world prices of oil and appreciation of the koruna against the dollar, recorded lower growth than forecasted.
Overall, the June inflation data are in line with the message of the current CNB forecast. According to this forecast, the inflation pressures from the domestic economy are not significant and commodity prices are currently the main source of inflation. According to the CNB forecast, both headline and monetary-policy relevant inflation will be close to the inflation target over the entire forecast horizon (the planned increase in the reduced VAT rate in 2012 has not yet been incorporated into the baseline scenario of the forecast).
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the June 2011 inflation figures
Inflation comes in slightly above CNB forecast in June 2011
According to figures released today, the price level increased by 1.8% year on year in June 2011. Annual headline inflation thus decreased from 2% in May. The annual rate of monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also declined to 1.8% in June and remains just below the inflation target.
Annual headline inflation was 0.1 percentage point higher in June 2011 than the CNB’s current forecast. Slightly higher-than-forecasted growth was recorded for food prices and administered prices. Food prices have been very volatile in recent months: higher-than-expected price growth occurred in May mainly as a result of a jump in bread prices, but this deviation was largely offset in June by untypical movements in prices of vegetables and potatoes. In June, administered prices reflected an increase in the administered price of gas for households, which had been forecasted to appear in inflation already in April. The slightly higher-than-forecasted inflation was also due to adjusted inflation excluding fuels, which, however, remains negative. By contrast, fuel prices, which responded to a previous decline in world prices of oil and appreciation of the koruna against the dollar, recorded lower growth than forecasted.
Overall, the June inflation data are in line with the message of the current CNB forecast. According to this forecast, the inflation pressures from the domestic economy are not significant and commodity prices are currently the main source of inflation. According to the CNB forecast, both headline and monetary-policy relevant inflation will be close to the inflation target over the entire forecast horizon (the planned increase in the reduced VAT rate in 2012 has not yet been incorporated into the baseline scenario of the forecast).
Tomáš Holub, Executive Director, Monetary and Statistics Department