The CNB comments on the March 2010 inflation figures
Inflation comes in only slightly below the CNB forecast in March 2010
According to figures released today, the price level increased by 0.7% year on year in March 2010. Compared to February, inflation thus picked up slightly but remained below the lower boundary of the tolerance band set around the CNB’s new 2% target valid since the beginning of 2010. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, was -0.3% in March.
Annual headline inflation was 0.1 percentage point lower in March 2010 than the CNB’s current forecast. The deviation from the forecast, which had been apparent mainly in January and February, thus virtually disappeared in March. The slightly lower annual inflation in March compared to what the CNB had expected was due to lower adjusted inflation excluding fuels. By contrast, fuel and food prices were higher than expected. The prediction of regulated prices and the effects of changes to indirect taxes roughly materialised.
The price developments observed in 2010 Q1 were broadly in line with the current forecast. According to this forecast, headline inflation will rise during the rest of 2010, getting just above the CNB’s target of 2% in the second half of the year as a result of tax changes.
At the monetary policy horizon, i.e. in 2011 H1, headline inflation will be close to the inflation target. Monetary-policy relevant inflation will be below headline inflation from the start of this year (owing to indirect tax changes). It will then approach the CNB’s target from below over the monetary policy horizon.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the March 2010 inflation figures
Inflation comes in only slightly below the CNB forecast in March 2010
According to figures released today, the price level increased by 0.7% year on year in March 2010. Compared to February, inflation thus picked up slightly but remained below the lower boundary of the tolerance band set around the CNB’s new 2% target valid since the beginning of 2010. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, was -0.3% in March.
Annual headline inflation was 0.1 percentage point lower in March 2010 than the CNB’s current forecast. The deviation from the forecast, which had been apparent mainly in January and February, thus virtually disappeared in March. The slightly lower annual inflation in March compared to what the CNB had expected was due to lower adjusted inflation excluding fuels. By contrast, fuel and food prices were higher than expected. The prediction of regulated prices and the effects of changes to indirect taxes roughly materialised.
The price developments observed in 2010 Q1 were broadly in line with the current forecast. According to this forecast, headline inflation will rise during the rest of 2010, getting just above the CNB’s target of 2% in the second half of the year as a result of tax changes.
At the monetary policy horizon, i.e. in 2011 H1, headline inflation will be close to the inflation target. Monetary-policy relevant inflation will be below headline inflation from the start of this year (owing to indirect tax changes). It will then approach the CNB’s target from below over the monetary policy horizon.
Tomáš Holub, Executive Director, Monetary and Statistics Department