The CNB comments on the August 2025 inflation figures
Annual inflation fell further to 2.5% in August (from 2.7% in July). This was slightly lower than our forecast (2.7%). We expect inflation to remain close to recent values for the rest of the year. Given the still elevated inflation and its unfavourable structure, there are still reasons for a cautious monetary policy approach.
Fluctuations in inflation this year are due largely to food and beverage prices. These items also contributed to the decline in annual inflation in August. Despite the slowdown during the summer, food price inflation remains elevated (4.5% y-o-y in August) and is likely to remain so for the rest of the year.
Volatile items helped lower headline inflation, but core inflation edged up to 2.8%, driven by goods prices. Inflation in market services remained unchanged but elevated (4.4% y-o-y). Core inflation was affected by rising housing costs this year, but they are also stabilising as expected. In August, year-on-year growth in imputed rent remained at 4.9% for the third time in a row.
The evolution of core inflation shows that overall price developments in the domestic economy have not yet fully stabilised and require tight monetary conditions.
Petr Sklenář, Executive Director of the Monetary Department
Inflation slows to 2.5% in August
The CNB comments on the August 2025 inflation figures
Annual inflation fell further to 2.5% in August (from 2.7% in July). This was slightly lower than our forecast (2.7%). We expect inflation to remain close to recent values for the rest of the year. Given the still elevated inflation and its unfavourable structure, there are still reasons for a cautious monetary policy approach.
Fluctuations in inflation this year are due largely to food and beverage prices. These items also contributed to the decline in annual inflation in August. Despite the slowdown during the summer, food price inflation remains elevated (4.5% y-o-y in August) and is likely to remain so for the rest of the year.
Volatile items helped lower headline inflation, but core inflation edged up to 2.8%, driven by goods prices. Inflation in market services remained unchanged but elevated (4.4% y-o-y). Core inflation was affected by rising housing costs this year, but they are also stabilising as expected. In August, year-on-year growth in imputed rent remained at 4.9% for the third time in a row.
The evolution of core inflation shows that overall price developments in the domestic economy have not yet fully stabilised and require tight monetary conditions.
Petr Sklenář, Executive Director of the Monetary Department