Inflation comes in above CNB forecast in June 2022
The CNB comments on the June 2022 inflation figures
According to figures released today, the price level increased by 17.2% year on year in June 2022. Inflation thus increased further, significantly exceeding the upper boundary of the tolerance band around the CNB’s target. Consumer prices adjusted for the first-round effects of changes to indirect taxes rose by 17.1% year on year in June.
The year-on-year increase in consumer prices in June was more than two percentage points higher than expected in the CNB’s spring forecast. The deviation was due to all components of inflation except changes to indirect taxes. It was caused most of all by surprisingly strong core inflation, but higher fuel prices and faster growth in food prices and administered prices also contributed significantly.
June 2022
year-on-year in %
MPR Spring 2022
actual value
CPI
15.0
17.2
Administered prices
23.5
24.9
First-round impacts of changes to indirect taxes
0.1
0.1
Adjusted for changes to indirect taxes
Prices of food, beverages, tobacco
12.4
13.9
Core inflation
12.7
14.6
Fuel prices
33.1
52.3
Monetary policy-relevant inflation
14.8
17.1
Core inflation reflects the still high producer price inflation abroad, driven by the difficult situation as regards material and component supplies and high oil prices, as well as persisting high domestic costs and the peaking of the exceptionally strong domestic demand pressures. Those pressures are particularly visible in the prices of consumer goods and services in core inflation. Within core inflation, the contribution of the cost of owner-occupied housing in the form of imputed rent is gaining further in strength. As expected, the rising administered price inflation reflects continued growth in gas and electricity bills for households. The increase in energy prices on exchanges to record highs in the spring months was also driven by Russia’s invasion of Ukraine. The war is also reflected in rising food prices due to soaring prices of agricultural commodities, as Ukraine is one of the world’s leading wheat exporters. The marked increase in oil prices as a result of the war and sanctions on Russian oil exports to the EU is also reflected in exceptionally high year-on-year growth in fuel prices.
Inflation in Q2 is an upside risk to the baseline scenario of the spring forecast and to the scenario featuring a more distant monetary policy horizon than the standard one used in the CNB’s forecasting system. All newly available data will be fully incorporated into the CNB’s summer forecast.
Petr Král, Executive Director, Monetary Department
Inflation comes in above CNB forecast in June 2022
The CNB comments on the June 2022 inflation figures
According to figures released today, the price level increased by 17.2% year on year in June 2022. Inflation thus increased further, significantly exceeding the upper boundary of the tolerance band around the CNB’s target. Consumer prices adjusted for the first-round effects of changes to indirect taxes rose by 17.1% year on year in June.
The year-on-year increase in consumer prices in June was more than two percentage points higher than expected in the CNB’s spring forecast. The deviation was due to all components of inflation except changes to indirect taxes. It was caused most of all by surprisingly strong core inflation, but higher fuel prices and faster growth in food prices and administered prices also contributed significantly.
Core inflation reflects the still high producer price inflation abroad, driven by the difficult situation as regards material and component supplies and high oil prices, as well as persisting high domestic costs and the peaking of the exceptionally strong domestic demand pressures. Those pressures are particularly visible in the prices of consumer goods and services in core inflation. Within core inflation, the contribution of the cost of owner-occupied housing in the form of imputed rent is gaining further in strength. As expected, the rising administered price inflation reflects continued growth in gas and electricity bills for households. The increase in energy prices on exchanges to record highs in the spring months was also driven by Russia’s invasion of Ukraine. The war is also reflected in rising food prices due to soaring prices of agricultural commodities, as Ukraine is one of the world’s leading wheat exporters. The marked increase in oil prices as a result of the war and sanctions on Russian oil exports to the EU is also reflected in exceptionally high year-on-year growth in fuel prices.
Inflation in Q2 is an upside risk to the baseline scenario of the spring forecast and to the scenario featuring a more distant monetary policy horizon than the standard one used in the CNB’s forecasting system. All newly available data will be fully incorporated into the CNB’s summer forecast.
Petr Král, Executive Director, Monetary Department