Inflation in line with the CNB’s forecast in November
The CNB comments on the November 2017 inflation figures
According to figures released today, the price level increased by 2.6% year on year in November 2017. 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 2.7% year on year in November.
Inflation was thus in line with the CNB’s forecast in November. Slightly lower-than-expected annual growth in administered prices, food prices and core inflation items was offset by somewhat higher annual growth in fuel prices.
The published data bear out the message of the CNB’s forecast. According to the forecast, inflation will stay above the 2% target, though within its tolerance band, not only for the rest of this year, but also for most of next year. The overall inflation pressures are currently peaking, reflecting accelerating wage growth amid robust growth of the domestic economy. Growth in domestic costs will record a further short-term increase owing to labour market tightness. The domestic inflation pressures will then moderate, aided by a stabilising effect of monetary policy. However, they will continue to outweigh the anti-inflationary effect of import prices. Their decline will reflect a strengthening koruna amid a temporary weakening of foreign producer price inflation. At the same time, the one-off factors that increased inflation at the start of this year will subside. Inflation will thus return to the 2% target from above over the monetary policy horizon, i.e. in late 2018 and early 2019.
Tomáš Holub, Executive Director, Monetary Department
Inflation in line with the CNB’s forecast in November
The CNB comments on the November 2017 inflation figures
According to figures released today, the price level increased by 2.6% year on year in November 2017. 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 2.7% year on year in November.
Inflation was thus in line with the CNB’s forecast in November. Slightly lower-than-expected annual growth in administered prices, food prices and core inflation items was offset by somewhat higher annual growth in fuel prices.
The published data bear out the message of the CNB’s forecast. According to the forecast, inflation will stay above the 2% target, though within its tolerance band, not only for the rest of this year, but also for most of next year. The overall inflation pressures are currently peaking, reflecting accelerating wage growth amid robust growth of the domestic economy. Growth in domestic costs will record a further short-term increase owing to labour market tightness. The domestic inflation pressures will then moderate, aided by a stabilising effect of monetary policy. However, they will continue to outweigh the anti-inflationary effect of import prices. Their decline will reflect a strengthening koruna amid a temporary weakening of foreign producer price inflation. At the same time, the one-off factors that increased inflation at the start of this year will subside. Inflation will thus return to the 2% target from above over the monetary policy horizon, i.e. in late 2018 and early 2019.
Tomáš Holub, Executive Director, Monetary Department