The CNB comments on the April 2013 inflation figures
Inflation comes in slightly below the CNB forecast in April
According to figures released today, the price level increased by 1.7% year on year in April 2013. Annual headline inflation was unchanged from March. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, was also flat in April, at 0.9%. This means that it was just below the lower boundary of the tolerance band around the CNB’s target.
Annual headline inflation was 0.1 percentage point lower in April than the CNB’s current forecast. The small downward deviation from the forecast was due above all to the fact that the expected pass-through of the increase in the excise duty on cigarettes in January to cigarette prices has not really begun yet. Acting in the same direction was a slightly higher-than-forecasted annual decline in prices in the segments of adjusted inflation excluding fuels and fuel prices. By contrast, annual food price inflation in April was somewhat higher than forecasted. The forecast for administered prices was fulfilled in April.
Despite these deviations, the published data are broadly in line with the message of the current CNB forecast. According to this forecast, current inflation reflects a moderation of the effect of tax changes (a lower impact of this year’s increase in both VAT rates compared to last year’s increase in the reduced rate), slowing growth in administered prices and continuing growth in food prices. Import prices are slightly inflationary owing to depreciation of the koruna. By contrast, the domestic economy is dampening inflation. According to the forecast, headline inflation will be slightly below the CNB’s 2% target this year despite substantial impacts of tax changes. Monetary-policy relevant inflation will be close to the lower boundary of the tolerance band this year and then return slowly to the target at the monetary policy horizon.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the April 2013 inflation figures
Inflation comes in slightly below the CNB forecast in April
According to figures released today, the price level increased by 1.7% year on year in April 2013. Annual headline inflation was unchanged from March. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, was also flat in April, at 0.9%. This means that it was just below the lower boundary of the tolerance band around the CNB’s target.
Annual headline inflation was 0.1 percentage point lower in April than the CNB’s current forecast. The small downward deviation from the forecast was due above all to the fact that the expected pass-through of the increase in the excise duty on cigarettes in January to cigarette prices has not really begun yet. Acting in the same direction was a slightly higher-than-forecasted annual decline in prices in the segments of adjusted inflation excluding fuels and fuel prices. By contrast, annual food price inflation in April was somewhat higher than forecasted. The forecast for administered prices was fulfilled in April.
Despite these deviations, the published data are broadly in line with the message of the current CNB forecast. According to this forecast, current inflation reflects a moderation of the effect of tax changes (a lower impact of this year’s increase in both VAT rates compared to last year’s increase in the reduced rate), slowing growth in administered prices and continuing growth in food prices. Import prices are slightly inflationary owing to depreciation of the koruna. By contrast, the domestic economy is dampening inflation. According to the forecast, headline inflation will be slightly below the CNB’s 2% target this year despite substantial impacts of tax changes. Monetary-policy relevant inflation will be close to the lower boundary of the tolerance band this year and then return slowly to the target at the monetary policy horizon.
Tomáš Holub, Executive Director, Monetary and Statistics Department