The CNB comments on the July 2011 inflation figures
Inflation comes in slightly below the CNB forecast in July 2011
According to figures released today, the price level increased by 1.7% year on year in July 2011. Headline annual inflation was thus 0.1 percentage point lower than in June. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also edged down to 1.7% in July and remains just below the inflation target.
Annual headline inflation in July 2011 was 0.1 percentage point lower than the CNB’s current forecast. This minor downward deviation from the forecast was entirely due to administered prices, which were affected by lower-than-expected growth in rents and health care prices. The other components of inflation were almost without exception in line with the forecast. Food price growth declined and fuel price growth slowed slightly as well. Annual core inflation, i.e. adjusted inflation excluding fuels, remains negative in line with the forecast, but its decline is moderating.
Overall, the July inflation data are in line with the overall message of the CNB forecast, according to which inflation pressures from the domestic economy are currently insignificant and commodity and food prices are the main source of inflation. Monetary-policy relevant inflation, according to the forecast, will be close to the inflation target over the entire forecast horizon. Headline inflation will be slightly above 3% in 2012 owing to an increase in the reduced VAT rate, but will return to the target at the start of 2013.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the July 2011 inflation figures
Inflation comes in slightly below the CNB forecast in July 2011
According to figures released today, the price level increased by 1.7% year on year in July 2011. Headline annual inflation was thus 0.1 percentage point lower than in June. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also edged down to 1.7% in July and remains just below the inflation target.
Annual headline inflation in July 2011 was 0.1 percentage point lower than the CNB’s current forecast. This minor downward deviation from the forecast was entirely due to administered prices, which were affected by lower-than-expected growth in rents and health care prices. The other components of inflation were almost without exception in line with the forecast. Food price growth declined and fuel price growth slowed slightly as well. Annual core inflation, i.e. adjusted inflation excluding fuels, remains negative in line with the forecast, but its decline is moderating.
Overall, the July inflation data are in line with the overall message of the CNB forecast, according to which inflation pressures from the domestic economy are currently insignificant and commodity and food prices are the main source of inflation. Monetary-policy relevant inflation, according to the forecast, will be close to the inflation target over the entire forecast horizon. Headline inflation will be slightly above 3% in 2012 owing to an increase in the reduced VAT rate, but will return to the target at the start of 2013.
Tomáš Holub, Executive Director, Monetary and Statistics Department