The CNB comments on the February 2013 inflation figures
Inflation comes in below the CNB forecast in February
According to figures released today, the price level increased by 1.7% year on year in February 2013. Annual headline inflation thus continued to slow for the fifth consecutive month. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also fell in February, to 0.9%. This means that it is just below the lower boundary of the tolerance band around the CNB’s target.
Annual headline inflation was 0.3 percentage point lower in February than the CNB’s current forecast. As in January, the downward deviation from the forecast was due to a lower-than expected rise in administered prices resulting from lower growth in housing-related energy prices (gas and heat for households). In addition, administered price inflation continues to reflect the transfer of deregulated rents from administered prices to the category of adjusted inflation excluding fuels. Annual food price inflation in February was also somewhat slower than forecasted. By contrast, the annual decline in prices in the adjusted inflation segment remained slightly more moderate in February than expected by the CNB due to the above-mentioned methodological change. Higher inflation was fostered by a less significant year-on-year decline in fuel prices than forecasted by the CNB. The effects of changes to indirect taxes were in line with the CNB’s expectations.
The published figures signal a slight anti-inflationary risk to the CNB’s current forecast. According to this forecast, tax changes and gradually falling food, administered and import price growth are currently the sources of inflation. By contrast, the domestic economy is dampening inflation. According to the forecast, headline inflation will be close to the CNB’s 2% target this year despite significant impacts of tax changes, and will fall slightly below the target next year after these impacts fade away. Monetary-policy relevant inflation will be in the lower half of the tolerance band around the CNB’s target until the end of 2014.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the February 2013 inflation figures
Inflation comes in below the CNB forecast in February
According to figures released today, the price level increased by 1.7% year on year in February 2013. Annual headline inflation thus continued to slow for the fifth consecutive month. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also fell in February, to 0.9%. This means that it is just below the lower boundary of the tolerance band around the CNB’s target.
Annual headline inflation was 0.3 percentage point lower in February than the CNB’s current forecast. As in January, the downward deviation from the forecast was due to a lower-than expected rise in administered prices resulting from lower growth in housing-related energy prices (gas and heat for households). In addition, administered price inflation continues to reflect the transfer of deregulated rents from administered prices to the category of adjusted inflation excluding fuels. Annual food price inflation in February was also somewhat slower than forecasted. By contrast, the annual decline in prices in the adjusted inflation segment remained slightly more moderate in February than expected by the CNB due to the above-mentioned methodological change. Higher inflation was fostered by a less significant year-on-year decline in fuel prices than forecasted by the CNB. The effects of changes to indirect taxes were in line with the CNB’s expectations.
The published figures signal a slight anti-inflationary risk to the CNB’s current forecast. According to this forecast, tax changes and gradually falling food, administered and import price growth are currently the sources of inflation. By contrast, the domestic economy is dampening inflation. According to the forecast, headline inflation will be close to the CNB’s 2% target this year despite significant impacts of tax changes, and will fall slightly below the target next year after these impacts fade away. Monetary-policy relevant inflation will be in the lower half of the tolerance band around the CNB’s target until the end of 2014.
Tomáš Holub, Executive Director, Monetary and Statistics Department