Inflation in line with the CNB’s forecast in April
The CNB comments on the April 2018 inflation figures
According to figures released today, annual inflation stood at 1.9% in April.Inflation is thus just below the CNB’s 2% inflation target. Consumer prices adjusted for the first-round effects of changes to indirect taxes rose by 1.8% year on year in April.
Inflation was in line with the CNB’s forecast in April. This is true not only of the overall figure, but also largely of the individual components of inflation.
The published figures thus bear out the message of the CNB’s latest forecast, according to which the recent decline in inflation slightly below the target was due to the fade-out of last year’s one-off factors and a fall in import prices. Domestic inflation pressures nonetheless remain strong, reflecting rapid wage growth amid buoyant growth of the Czech economy. These pressures will gradually ease, but the anti-inflationary effect of import prices will weaken as well. Import prices continue to reflect the strengthening koruna this year. Inflation will remain slightly below the target this year. Next year, however, stable growth in foreign producer prices amid distinctly slower appreciation of the koruna will foster a renewed increase in import prices. Inflation will thus return very close to the 2% target at the monetary policy horizon, i.e. in the second and third quarters of next year.
Petr Král, Deputy Executive Director, Monetary Department
Inflation in line with the CNB’s forecast in April
The CNB comments on the April 2018 inflation figures
According to figures released today, annual inflation stood at 1.9% in April.Inflation is thus just below the CNB’s 2% inflation target. Consumer prices adjusted for the first-round effects of changes to indirect taxes rose by 1.8% year on year in April.
Inflation was in line with the CNB’s forecast in April. This is true not only of the overall figure, but also largely of the individual components of inflation.
The published figures thus bear out the message of the CNB’s latest forecast, according to which the recent decline in inflation slightly below the target was due to the fade-out of last year’s one-off factors and a fall in import prices. Domestic inflation pressures nonetheless remain strong, reflecting rapid wage growth amid buoyant growth of the Czech economy. These pressures will gradually ease, but the anti-inflationary effect of import prices will weaken as well. Import prices continue to reflect the strengthening koruna this year. Inflation will remain slightly below the target this year. Next year, however, stable growth in foreign producer prices amid distinctly slower appreciation of the koruna will foster a renewed increase in import prices. Inflation will thus return very close to the 2% target at the monetary policy horizon, i.e. in the second and third quarters of next year.
Petr Král, Deputy Executive Director, Monetary Department