The CNB comments on the August 2019 inflation figures
According to figures released today, the price level increased by 2.9% year on year in August 2019. Inflation thus remains in 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 3% year on year in August 2019.
Inflation was 0.3 percentage point above the CNB’s forecast in August. As in July, the deviation from the forecast was due mostly to higher-than-expected core inflation. Slightly faster annual growth in food prices and, to a lesser extent, a slower-than-forecasted decline in fuel prices acted in the same direction in August. Growth in administered prices and the first-round effects of changes to indirect taxes were in line with the forecast.
The published figures represent a slight inflationary risk to the CNB’s current forecast. According to the forecast, inflation will remain in the upper half of the tolerance band around the CNB’s target in the remainder of this year, reflecting persisting strong domestic price pressures and high growth in administered prices and food prices. Inflation will decrease at the start of next year, owing to the previous monetary policy tightening and an unwinding of the currently high growth in administered prices. It will decrease towards the 2% target during the year.
Petr Král, Executive Director, Monetary Department