The CNB comments on the April 2025 inflation figures
Annual inflation decreased to 1.8% in April, its lowest level since March 2018. This is mainly due to volatile food, beverage and tobacco prices, with prices of alcoholic beverages in particular declining month on month within this category. This may have been related to discounts during the Easter holidays, which this year fell in April, whereas last year they were mostly in March.
Core inflation rose only marginally compared to March, reaching 2.6%. However, this apparent stability conceals movements in opposite directions. On the one hand, growth in market services prices picked up (4.5%), while on the other hand, the increase in prices of core goods stopped. In the area of market services prices, the contribution of imputed rent (which expresses the cost of owner-occupied housing) is increasing, currently rising by 4.1% year on year. However, prices of other items, such as holidays and air travel, also recorded stronger growth. This suggests that, despite the current low level of headline inflation, services inflation is not fully stabilised and continues to call for a cautious approach to monetary policy.
We expect inflation to stay between 2% and 3% in the months ahead. It will decline to the CNB’s 2% target next year.
Jakub Matějů, Acting Executive Director of the Monetary Department
Inflation is at its lowest level in seven years
The CNB comments on the April 2025 inflation figures
Annual inflation decreased to 1.8% in April, its lowest level since March 2018. This is mainly due to volatile food, beverage and tobacco prices, with prices of alcoholic beverages in particular declining month on month within this category. This may have been related to discounts during the Easter holidays, which this year fell in April, whereas last year they were mostly in March.
Core inflation rose only marginally compared to March, reaching 2.6%. However, this apparent stability conceals movements in opposite directions. On the one hand, growth in market services prices picked up (4.5%), while on the other hand, the increase in prices of core goods stopped. In the area of market services prices, the contribution of imputed rent (which expresses the cost of owner-occupied housing) is increasing, currently rising by 4.1% year on year. However, prices of other items, such as holidays and air travel, also recorded stronger growth. This suggests that, despite the current low level of headline inflation, services inflation is not fully stabilised and continues to call for a cautious approach to monetary policy.
We expect inflation to stay between 2% and 3% in the months ahead. It will decline to the CNB’s 2% target next year.
Jakub Matějů, Acting Executive Director of the Monetary Department