The CNB comments on the March 2011 inflation figures
Inflation comes in below the CNB forecast again in March 2011
According to figures released today, the price level increased by 1.7% year on year in March 2011. Headline inflation thus decreased marginally compared to February and remains slightly below the CNB’s inflation target. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, fell to 1.5% in March and is thus in the lower half of the tolerance band for the inflation target.
Annual headline inflation was 0.2 percentage point lower in March this year than the CNB’s current forecast. As in the previous two months, the lower-than-forecasted inflation was due to food prices, which continued to respond to high growth in world and domestic prices of agricultural producers to only a limited extent. Administered price inflation was also slightly lower than forecasted. By contrast, growth in fuel prices was slightly higher than expected by the CNB due to the evolution of world oil prices. The forecast for adjusted inflation excluding fuels proved to be accurate and inflation in this segment remains negative.
Despite the aforementioned deviations from the forecast, the message of the CNB’s current forecast remains valid. According to the forecast, inflation is being driven mainly by rising commodity prices, whereas the inflation pressures from the domestic economy are insignificant and growth in import prices of goods with a high degree of processing remains subdued. The forecast predicts that annual headline inflation will be close to the inflation target in the remainder of this year. At the same time, the forecast expects monetary-policy relevant inflation to converge to headline inflation, and therefore also to the CNB’s inflation target, during the first half of the year.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the March 2011 inflation figures
Inflation comes in below the CNB forecast again in March 2011
According to figures released today, the price level increased by 1.7% year on year in March 2011. Headline inflation thus decreased marginally compared to February and remains slightly below the CNB’s inflation target. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, fell to 1.5% in March and is thus in the lower half of the tolerance band for the inflation target.
Annual headline inflation was 0.2 percentage point lower in March this year than the CNB’s current forecast. As in the previous two months, the lower-than-forecasted inflation was due to food prices, which continued to respond to high growth in world and domestic prices of agricultural producers to only a limited extent. Administered price inflation was also slightly lower than forecasted. By contrast, growth in fuel prices was slightly higher than expected by the CNB due to the evolution of world oil prices. The forecast for adjusted inflation excluding fuels proved to be accurate and inflation in this segment remains negative.
Despite the aforementioned deviations from the forecast, the message of the CNB’s current forecast remains valid. According to the forecast, inflation is being driven mainly by rising commodity prices, whereas the inflation pressures from the domestic economy are insignificant and growth in import prices of goods with a high degree of processing remains subdued. The forecast predicts that annual headline inflation will be close to the inflation target in the remainder of this year. At the same time, the forecast expects monetary-policy relevant inflation to converge to headline inflation, and therefore also to the CNB’s inflation target, during the first half of the year.
Tomáš Holub, Executive Director, Monetary and Statistics Department