The CNB comments on the September 2012 inflation figures
Inflation remains slightly below the CNB forecast in September 2012
According to figures released today, the price level increased by 3.4% year on year in September 2012. Annual headline inflation thus rose slightly compared to August. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also increased somewhat in September, reaching 2.1%, which means that it was just above the CNB’s target.
Annual headline inflation was 0.1 percentage point lower in September than the CNB’s current forecast. The downward deviation from the forecast was due mainly to lower adjusted inflation excluding fuels, which remains negative and above all reflects subdued domestic demand. Annual growth in food prices and administered prices was also slightly lower than forecasted. By contrast, fuel prices grew much faster year on year in September than the CNB had expected, thereby significantly reducing the deviation of inflation from the forecast. The first-round effects of changes to indirect taxes were in line with the forecast.
The published data continue to bear out the message of the CNB’s current forecast regarding the anti-inflationary effect of the domestic economy. This year’s elevated inflation is due to a combination of several one-off factors, in particular the VAT change, growth in food prices and administered prices and the gradual pass-through of the earlier exchange rate depreciation to consumer prices. According to the forecast, headline inflation should be slightly above 3% for the rest of this year as a result of the VAT increase. Headline inflation is expected to fall to the CNB’s target in late 2012/early 2013. Monetary-policy relevant inflation will be noticeably lower than headline inflation throughout this year owing to the VAT change and is expected to decline below the target at the end of this year.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the September 2012 inflation figures
Inflation remains slightly below the CNB forecast in September 2012
According to figures released today, the price level increased by 3.4% year on year in September 2012. Annual headline inflation thus rose slightly compared to August. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also increased somewhat in September, reaching 2.1%, which means that it was just above the CNB’s target.
Annual headline inflation was 0.1 percentage point lower in September than the CNB’s current forecast. The downward deviation from the forecast was due mainly to lower adjusted inflation excluding fuels, which remains negative and above all reflects subdued domestic demand. Annual growth in food prices and administered prices was also slightly lower than forecasted. By contrast, fuel prices grew much faster year on year in September than the CNB had expected, thereby significantly reducing the deviation of inflation from the forecast. The first-round effects of changes to indirect taxes were in line with the forecast.
The published data continue to bear out the message of the CNB’s current forecast regarding the anti-inflationary effect of the domestic economy. This year’s elevated inflation is due to a combination of several one-off factors, in particular the VAT change, growth in food prices and administered prices and the gradual pass-through of the earlier exchange rate depreciation to consumer prices. According to the forecast, headline inflation should be slightly above 3% for the rest of this year as a result of the VAT increase. Headline inflation is expected to fall to the CNB’s target in late 2012/early 2013. Monetary-policy relevant inflation will be noticeably lower than headline inflation throughout this year owing to the VAT change and is expected to decline below the target at the end of this year.
Tomáš Holub, Executive Director, Monetary and Statistics Department