Inflation comes in slightly above CNB forecast in March 2019
The CNB comments on the March 2019 inflation figures
According to figures released today, annual inflation accelerated to 3% in March 2019. Inflation thus increased to the upper boundary 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 3.1% year on year in March 2019.
Inflation was 0.3 percentage point above the CNB’s forecast in March. Its deviation from the prediction was the same as a month earlier. The difference was due to stronger-than-expected annual growth in food prices and slightly higher core inflation. By contrast, the marked acceleration in annual administered price inflation recorded in March was fully in line with the central bank’s forecast. Fuel prices returned to year-on-year growth, also as predicted. The first-round effects of changes to indirect taxes were also in line with the CNB’s expectations.
The published figures represent a slight inflationary risk to the CNB’s current forecast. According to the forecast, the overall inflation pressures remain strong, owing mainly to rising wages and continued growth of the domestic economy. These factors are reflected primarily in higher core inflation. Growth in food prices and administered prices accelerated as well. By contrast, the inflationary effect of import prices weakened. 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. 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 an easing of 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 slightly above CNB forecast in March 2019
The CNB comments on the March 2019 inflation figures
According to figures released today, annual inflation accelerated to 3% in March 2019. Inflation thus increased to the upper boundary 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 3.1% year on year in March 2019.
Inflation was 0.3 percentage point above the CNB’s forecast in March. Its deviation from the prediction was the same as a month earlier. The difference was due to stronger-than-expected annual growth in food prices and slightly higher core inflation. By contrast, the marked acceleration in annual administered price inflation recorded in March was fully in line with the central bank’s forecast. Fuel prices returned to year-on-year growth, also as predicted. The first-round effects of changes to indirect taxes were also in line with the CNB’s expectations.
The published figures represent a slight inflationary risk to the CNB’s current forecast. According to the forecast, the overall inflation pressures remain strong, owing mainly to rising wages and continued growth of the domestic economy. These factors are reflected primarily in higher core inflation. Growth in food prices and administered prices accelerated as well. By contrast, the inflationary effect of import prices weakened. 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. 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 an easing of 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