The CNB comments on the January 2015 inflation figures
Inflation in line with the CNB’s forecast in January
According to figures released today, the price level increased by 0.1% year on year in January 2015. Consumer prices adjusted for the first-round effects of changes to indirect taxes fell slightly year on year in January. Inflation is thus still well below the lower boundary of the tolerance band around the CNB’s target.
Annual headline inflation was in line with the CNB’s expectations in January and only minor deviations from the forecast were recorded in the structure of inflation. Food prices declined rather more markedly in year-on-year terms in January than the forecast had expected. By contrast, administered prices saw a moderate annual increase in January, whereas the forecast had predicted a slight decrease. A somewhat less pronounced annual decline in fuel prices acted in the same direction, still reflecting the recent drop in oil prices on world markets. By contrast, adjusted inflation excluding fuels was fully in line with what the forecast had expected, recording a further slight increase. The effects of changes to indirect taxes were also in line with the CNB forecast in January 2015.
The published data continue to confirm the opinion that the decision made in November 2013 to start using the exchange rate as an additional monetary policy instrument contributed significantly to averting the threat of deflation linked with a drop in demand. The pass-through of the weakened exchange rate of the koruna to inflation via import prices is fading, but the exchange rate is still contributing to growth in the domestic economy, which is fostering higher prices. The CNB forecast expects both headline and monetary policy-relevant inflation to be at zero or slightly negative levels in 2015 and then rise to the 2% target in 2016. The overall upward pressures on consumer prices are currently disappearing, as a decline in producer prices in the euro area coupled with a fall in global prices of energy commodities is resulting in a decrease in costs stemming from import prices. The anti-inflationary effect of import prices will subside at the start of 2016. By contrast, continued growth in domestic economic activity and gradually accelerating wage growth will foster higher prices over the entire forecast horizon.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the January 2015 inflation figures
Inflation in line with the CNB’s forecast in January
According to figures released today, the price level increased by 0.1% year on year in January 2015. Consumer prices adjusted for the first-round effects of changes to indirect taxes fell slightly year on year in January. Inflation is thus still well below the lower boundary of the tolerance band around the CNB’s target.
Annual headline inflation was in line with the CNB’s expectations in January and only minor deviations from the forecast were recorded in the structure of inflation. Food prices declined rather more markedly in year-on-year terms in January than the forecast had expected. By contrast, administered prices saw a moderate annual increase in January, whereas the forecast had predicted a slight decrease. A somewhat less pronounced annual decline in fuel prices acted in the same direction, still reflecting the recent drop in oil prices on world markets. By contrast, adjusted inflation excluding fuels was fully in line with what the forecast had expected, recording a further slight increase. The effects of changes to indirect taxes were also in line with the CNB forecast in January 2015.
The published data continue to confirm the opinion that the decision made in November 2013 to start using the exchange rate as an additional monetary policy instrument contributed significantly to averting the threat of deflation linked with a drop in demand. The pass-through of the weakened exchange rate of the koruna to inflation via import prices is fading, but the exchange rate is still contributing to growth in the domestic economy, which is fostering higher prices. The CNB forecast expects both headline and monetary policy-relevant inflation to be at zero or slightly negative levels in 2015 and then rise to the 2% target in 2016. The overall upward pressures on consumer prices are currently disappearing, as a decline in producer prices in the euro area coupled with a fall in global prices of energy commodities is resulting in a decrease in costs stemming from import prices. The anti-inflationary effect of import prices will subside at the start of 2016. By contrast, continued growth in domestic economic activity and gradually accelerating wage growth will foster higher prices over the entire forecast horizon.
Tomáš Holub, Executive Director, Monetary and Statistics Department