The CNB comments on the February 2015 inflation figures
Inflation comes in slightly above CNB forecast in February
According to figures released today, the price level increased by 0.1% year on year in February 2015. Consumer price inflation adjusted for the first-round effects of changes to indirect taxes fell slightly year on year in February. Inflation is thus still well below the lower boundary of the tolerance band around the CNB’s target.
Annual headline inflation was slightly above the CNB’s forecast in February. As in January, administered prices saw a moderate year-on-year increase, whereas the forecast had predicted a slight year-on-year decrease. A rather less pronounced year-on-year decline in fuel prices than expected acted in the same direction in the period under review. Adjusted inflation excluding fuels was also slightly higher in February than expected by the forecast. Conversely, food prices recorded a slightly stronger year-on-year decrease in February than forecasted. The effects of changes to indirect taxes were fully in line with the CNB forecast in February 2015.
The published data continue to confirm the opinion that the decision made in November 2013 to start using the exchange rate as an additional monetary policy instrument contributed significantly to averting the threat of deflation linked with a drop in demand. The pass-through of the weakened exchange rate to inflation through import prices is unwinding, but the exchange rate is still contributing to growth in the domestic economy, which is fostering higher prices. The current CNB forecast expects both headline and monetary policy-relevant inflation to be around zero or slightly negative in 2015 and then rise to the 2% target in 2016. The overall upward pressures on consumer prices are currently fading away, as the decline in producer prices in the euro area combined with the fall in global prices of energy commodities is leading to a reduction in costs arising from import prices; Their anti-inflationary effect will fade in early 2016. By contrast, continuing growth in domestic economic activity and gradually accelerating wage growth will foster higher prices over the entire forecast horizon.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the February 2015 inflation figures
Inflation comes in slightly above CNB forecast in February
According to figures released today, the price level increased by 0.1% year on year in February 2015. Consumer price inflation adjusted for the first-round effects of changes to indirect taxes fell slightly year on year in February. Inflation is thus still well below the lower boundary of the tolerance band around the CNB’s target.
Annual headline inflation was slightly above the CNB’s forecast in February. As in January, administered prices saw a moderate year-on-year increase, whereas the forecast had predicted a slight year-on-year decrease. A rather less pronounced year-on-year decline in fuel prices than expected acted in the same direction in the period under review. Adjusted inflation excluding fuels was also slightly higher in February than expected by the forecast. Conversely, food prices recorded a slightly stronger year-on-year decrease in February than forecasted. The effects of changes to indirect taxes were fully in line with the CNB forecast in February 2015.
The published data continue to confirm the opinion that the decision made in November 2013 to start using the exchange rate as an additional monetary policy instrument contributed significantly to averting the threat of deflation linked with a drop in demand. The pass-through of the weakened exchange rate to inflation through import prices is unwinding, but the exchange rate is still contributing to growth in the domestic economy, which is fostering higher prices. The current CNB forecast expects both headline and monetary policy-relevant inflation to be around zero or slightly negative in 2015 and then rise to the 2% target in 2016. The overall upward pressures on consumer prices are currently fading away, as the decline in producer prices in the euro area combined with the fall in global prices of energy commodities is leading to a reduction in costs arising from import prices; Their anti-inflationary effect will fade in early 2016. By contrast, continuing growth in domestic economic activity and gradually accelerating wage growth will foster higher prices over the entire forecast horizon.
Tomáš Holub, Executive Director, Monetary and Statistics Department