Inflation comes in above the CNB’s target in January 2019
The CNB comments on the January 2019 inflation figures
According to figures released today, annual inflation accelerated to 2.5% in January 2019. Inflation thus increased into the upper half of the tolerance band around the CNB’s 2% target. Consumer prices adjusted for the first-round effects of changes to indirect taxes rose by 2.4% year on year in January 2019.
Inflation was 0.5 percentage point above the CNB’s forecast in January. This deviation was due mainly to higher core inflation and an earlier pick-up in food price growth compared to the forecast. Annual growth in fuel prices was also above the forecast in January, albeit only slightly. In line with the forecast, administered price inflation accelerated markedly in January. The first-round effects of changes to indirect taxes were also in line with the forecast.
The published figures represent an inflationary risk to the CNB’s current forecast. According to the forecast, the overall inflation pressures remain strong, owing mainly to buoyant wage growth and continued growth of the domestic economy. These factors are reflected primarily in core inflation. By contrast, the inflationary effect of import prices is weakening. According to the forecast, inflation will remain temporarily in the upper half of the tolerance band around the CNB’s target in the first half of this year. This will be due to core inflation and faster growth in food prices and administered prices. In the subsequent period, however, the overall inflation pressures will ease and inflation will slow. This will be due initially to an intensifying decline in import prices, reflecting renewed appreciation of the koruna and a fall in inflation abroad. In addition, domestic inflation pressures will start to weaken slowly as a result of gradually falling wage growth. This will cause inflation to stabilise very close to the CNB’s 2% target.
Petr Král, Executive Director, Monetary Department
Inflation comes in above the CNB’s target in January 2019
The CNB comments on the January 2019 inflation figures
According to figures released today, annual inflation accelerated to 2.5% in January 2019. Inflation thus increased into the upper half of the tolerance band around the CNB’s 2% target. Consumer prices adjusted for the first-round effects of changes to indirect taxes rose by 2.4% year on year in January 2019.
Inflation was 0.5 percentage point above the CNB’s forecast in January. This deviation was due mainly to higher core inflation and an earlier pick-up in food price growth compared to the forecast. Annual growth in fuel prices was also above the forecast in January, albeit only slightly. In line with the forecast, administered price inflation accelerated markedly in January. The first-round effects of changes to indirect taxes were also in line with the forecast.
The published figures represent an inflationary risk to the CNB’s current forecast. According to the forecast, the overall inflation pressures remain strong, owing mainly to buoyant wage growth and continued growth of the domestic economy. These factors are reflected primarily in core inflation. By contrast, the inflationary effect of import prices is weakening. According to the forecast, inflation will remain temporarily in the upper half of the tolerance band around the CNB’s target in the first half of this year. This will be due to core inflation and faster growth in food prices and administered prices. In the subsequent period, however, the overall inflation pressures will ease and inflation will slow. This will be due initially to an intensifying decline in import prices, reflecting renewed appreciation of the koruna and a fall in inflation abroad. In addition, domestic inflation pressures will start to weaken slowly as a result of gradually falling wage growth. This will cause inflation to stabilise very close to the CNB’s 2% target.
Petr Král, Executive Director, Monetary Department