CNB Vice-Governor Oldřich Dědek comments on the July 2001 inflation figures
8.8.2001
Inflation further accelerated in July, with the consumer price index rising by 5.9% compared
with the same period a year earlier. This was, however, the result of sizeable price movements in
only a very narrow segment of the consumer basket, not of across-the-board price growth. As
expected, the pick-up in inflation was fostered by the deregulations typical of this period
(increases in prices of gas and heating). One positive development was that the seasonal reduction
in food prices was slightly higher than expected. Compared with previous months, this represents a
certain calming in this segment. A greater surprise for the CNB was the increase in prices of
package holidays; such a large rise had not been expected following the increases in May and June.
Prices of other items, representing about two thirds of the consumer basket, did not show any
substantial changes.
Although the July data on inflation do not suggest any general strengthening of demand
pressures, the central bank is acutely aware of the increasing risk of inflationary expectations,
fuelled not only by the series of cost shocks, but also by expansive fiscal policy.
CNB Vice-Governor Oldřich Dědek comments on the July 2001 inflation figures
Inflation further accelerated in July, with the consumer price index rising by 5.9% compared with the same period a year earlier. This was, however, the result of sizeable price movements in only a very narrow segment of the consumer basket, not of across-the-board price growth. As expected, the pick-up in inflation was fostered by the deregulations typical of this period (increases in prices of gas and heating). One positive development was that the seasonal reduction in food prices was slightly higher than expected. Compared with previous months, this represents a certain calming in this segment. A greater surprise for the CNB was the increase in prices of package holidays; such a large rise had not been expected following the increases in May and June. Prices of other items, representing about two thirds of the consumer basket, did not show any substantial changes.
Although the July data on inflation do not suggest any general strengthening of demand pressures, the central bank is acutely aware of the increasing risk of inflationary expectations, fuelled not only by the series of cost shocks, but also by expansive fiscal policy.
Responsible:
Alice Frišaufová
CNB Spokesperson