The CNB comments on the October 2010 inflation figures
Inflation comes in slightly below the CNB forecast
According to figures released today, the price level increased by 2.0% year on year in October 2010. Headline inflation remained unchanged compared to September, standing at the CNB’s inflation target level. At 0.9%, monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, remained close to the lower half of the inflation-target tolerance band.
Annual headline inflation was 0.2 percentage point lower in October 2010 than is the CNB’s current forecast. This deviation from the forecast was due particularly to slower-than-expected growth in food prices, which are so far responding to high growth in world and domestic prices of agricultural producers to only a limited extent. Adjusted inflation excluding fuels was slightly lower as well. By contrast, fuel prices rose somewhat faster than the CNB expected, however, the impact of this deviation on headline inflation was negligible.
Despite the deviation from the forecast, the October data suggest that annual headline inflation will be around the inflation target at the end of 2010. This is in line with the CNB´ s expectations, according to which headline inflation is expected to be close to the inflation target also in the forthcoming two years. Monetary–policy relevant inflation should continue increasing, approaching the inflation target in the first half of 2011.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the October 2010 inflation figures
Inflation comes in slightly below the CNB forecast
According to figures released today, the price level increased by 2.0% year on year in October 2010. Headline inflation remained unchanged compared to September, standing at the CNB’s inflation target level. At 0.9%, monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, remained close to the lower half of the inflation-target tolerance band.
Annual headline inflation was 0.2 percentage point lower in October 2010 than is the CNB’s current forecast. This deviation from the forecast was due particularly to slower-than-expected growth in food prices, which are so far responding to high growth in world and domestic prices of agricultural producers to only a limited extent. Adjusted inflation excluding fuels was slightly lower as well. By contrast, fuel prices rose somewhat faster than the CNB expected, however, the impact of this deviation on headline inflation was negligible.
Despite the deviation from the forecast, the October data suggest that annual headline inflation will be around the inflation target at the end of 2010. This is in line with the CNB´ s expectations, according to which headline inflation is expected to be close to the inflation target also in the forthcoming two years. Monetary–policy relevant inflation should continue increasing, approaching the inflation target in the first half of 2011.
Tomáš Holub, Executive Director, Monetary and Statistics Department