The CNB comments on the April 2019 inflation figures
According to figures released today, the price level increased by 2.8% year on year in April 2019. Inflation thus declined slightly compared with March but 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 2.9% year on year in April 2019.
Inflation was 0.1 percentage point below the CNB’s forecast in April. The deviation from the forecast was due to an unexpected slowdown in annual food price inflation. Slightly higher-than-forecasted fuel price inflation had the opposite effect. Core inflation and growth in administered prices were in line with the forecast. The first-round effects of changes to indirect taxes in April were also in line with the CNB’s expectations.
The published figures bear out the message of the CNB’s current forecast. According to the forecast, inflation will continue to be affected this year by fundamental price pressures, stronger administered price inflation and renewed growth in food prices. However, the inflation pressures are now easing overall. Besides a temporary fade-out of the inflationary effect of import prices, the domestic inflation pressures are also diminishing owing to gradually falling wage growth and slower growth in economic activity. Inflation will thus be in the upper half of the tolerance band over the rest of this year and will decrease to the 2% target next year. This will also be fostered by the monetary policy settings and the fading out of the currently high growth in administered prices.
Petr Král, Executive Director, Monetary Department