Inflation comes in slightly below the CNB’s forecast in October 2019
The CNB comments on the October 2019 inflation figures
According to figures released today, the price level increased by 2.7% year on year in October 2019. Inflation was thus the same as in September and 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 2.8% year on year in October 2019.
The annual consumer price inflation rate in October was 0.1 percentage point lower than the CNB forecast. The deviations of the components of inflation from the forecast were insignificant and almost offset each other. Food price inflation and administered price inflation were slightly lower than forecasted. By contrast, core inflation was slightly higher than in the forecast. The year-on-year decline in fuel prices and the first-round effects of changes to indirect taxes were fully in line with the forecast.
The published figures bear out the message of the CNB’s current forecast. According to the forecast, inflation will remain just below the upper boundary of the tolerance band around the CNB’s target for the rest of this year and early next year, reflecting only gradually abating domestic price pressures and further accelerating administered price inflation. Inflation will moderate during 2020 due to the unwinding of a large increase in administered prices, easing domestic price pressures and monetary policy tightening. However, the decrease in inflation will be slowed next year by the price impacts of expected changes to indirect taxes. They will fade out in 2021 and inflation will thus be close to the 2% target.
Petr Král, Executive Director, Monetary Department
Inflation comes in slightly below the CNB’s forecast in October 2019
The CNB comments on the October 2019 inflation figures
According to figures released today, the price level increased by 2.7% year on year in October 2019. Inflation was thus the same as in September and 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 2.8% year on year in October 2019.
The annual consumer price inflation rate in October was 0.1 percentage point lower than the CNB forecast. The deviations of the components of inflation from the forecast were insignificant and almost offset each other. Food price inflation and administered price inflation were slightly lower than forecasted. By contrast, core inflation was slightly higher than in the forecast. The year-on-year decline in fuel prices and the first-round effects of changes to indirect taxes were fully in line with the forecast.
The published figures bear out the message of the CNB’s current forecast. According to the forecast, inflation will remain just below the upper boundary of the tolerance band around the CNB’s target for the rest of this year and early next year, reflecting only gradually abating domestic price pressures and further accelerating administered price inflation. Inflation will moderate during 2020 due to the unwinding of a large increase in administered prices, easing domestic price pressures and monetary policy tightening. However, the decrease in inflation will be slowed next year by the price impacts of expected changes to indirect taxes. They will fade out in 2021 and inflation will thus be close to the 2% target.
Petr Král, Executive Director, Monetary Department