The CNB comments on the April 2011 inflation figures
Inflation comes in slightly below the CNB forecast in April 2011
According to figures released today, the price level increased by 1.6% year on year in April 2011. Headline inflation thus decreased marginally compared to March 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, remained at 1.5% and is thus still in the lower half of the tolerance band around the inflation target.
Annual headline inflation was 0.1 percentage point lower in April this year than the CNB’s current forecast. This deviation was chiefly due to lower-than-expected growth in administered prices. According to the CZSO, the increase in the administered price of gas for households, which had been announced and which the CNB had included in its forecast, did not materialise in April. Food price inflation was also somewhat lower than expected by the CNB. By contrast, slightly higher adjusted inflation excluding fuels acted in the opposite direction.
Despite these deviations, the April inflation data are in line with the message of the new 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. Headline inflation will be close to the inflation target over the entire forecast horizon. Given the small impact of the changes to indirect taxes incorporated into the baseline scenario of the forecast (consisting solely of the fading past – or, for 2012, expected – changes in excise duties on cigarettes), monetary-policy relevant inflation will – along with headline inflation – be close to the target. This will be fostered by gradually strengthening inflationary pressures from the domestic economy linked with a pick-up in the currently low wage growth. These pressures will be partly offset by gradual exchange rate appreciation amid a calming of commodity price growth.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the April 2011 inflation figures
Inflation comes in slightly below the CNB forecast in April 2011
According to figures released today, the price level increased by 1.6% year on year in April 2011. Headline inflation thus decreased marginally compared to March 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, remained at 1.5% and is thus still in the lower half of the tolerance band around the inflation target.
Annual headline inflation was 0.1 percentage point lower in April this year than the CNB’s current forecast. This deviation was chiefly due to lower-than-expected growth in administered prices. According to the CZSO, the increase in the administered price of gas for households, which had been announced and which the CNB had included in its forecast, did not materialise in April. Food price inflation was also somewhat lower than expected by the CNB. By contrast, slightly higher adjusted inflation excluding fuels acted in the opposite direction.
Despite these deviations, the April inflation data are in line with the message of the new 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. Headline inflation will be close to the inflation target over the entire forecast horizon. Given the small impact of the changes to indirect taxes incorporated into the baseline scenario of the forecast (consisting solely of the fading past – or, for 2012, expected – changes in excise duties on cigarettes), monetary-policy relevant inflation will – along with headline inflation – be close to the target. This will be fostered by gradually strengthening inflationary pressures from the domestic economy linked with a pick-up in the currently low wage growth. These pressures will be partly offset by gradual exchange rate appreciation amid a calming of commodity price growth.
Tomáš Holub, Executive Director, Monetary and Statistics Department