The CNB comments on the October 2012 inflation figures
Inflation comes in slightly above the CNB forecast in October 2012
According to figures released today, the price level increased by 3.4% year on year in October 2012. Annual headline inflation was the same as in September. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also remained unchanged in October at 2.1%, which means that it was just above the CNB’s target.
Annual headline inflation was 0.1 percentage point higher in October than the CNB’s current forecast. The small upward deviation from the forecast was due chiefly to higher-than-expected annual food price inflation. Acting in the same direction was a slightly lower-than-forecasted annual decline in prices in the segment of adjusted inflation excluding fuels, which, however, remains negative, primarily reflecting subdued domestic demand. By contrast, annual growth in administered prices and fuel prices was slightly lower than expected by the CNB, reducing the deviation of inflation from the forecast. The first-round effects of changes to indirect taxes were in line with the forecast.
The published data confirm the message of the CNB’s current forecast regarding the anti-inflationary effect of the domestic economy. Tax changes, food price growth and gradually subsiding import price growth are the sources of the currently elevated inflation. According to the forecast, headline inflation will stay slightly above the inflation target next year owing to an increase in both VAT rates by one percentage point. After this tax effect drops out in early 2014, it will fall slightly below the target. Monetary-policy relevant inflation will stay in the lower half of the tolerance band around the CNB’s target until the end of 2014, i.e. including at the monetary policy horizon.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the October 2012 inflation figures
Inflation comes in slightly above the CNB forecast in October 2012
According to figures released today, the price level increased by 3.4% year on year in October 2012. Annual headline inflation was the same as in September. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also remained unchanged in October at 2.1%, which means that it was just above the CNB’s target.
Annual headline inflation was 0.1 percentage point higher in October than the CNB’s current forecast. The small upward deviation from the forecast was due chiefly to higher-than-expected annual food price inflation. Acting in the same direction was a slightly lower-than-forecasted annual decline in prices in the segment of adjusted inflation excluding fuels, which, however, remains negative, primarily reflecting subdued domestic demand. By contrast, annual growth in administered prices and fuel prices was slightly lower than expected by the CNB, reducing the deviation of inflation from the forecast. The first-round effects of changes to indirect taxes were in line with the forecast.
The published data confirm the message of the CNB’s current forecast regarding the anti-inflationary effect of the domestic economy. Tax changes, food price growth and gradually subsiding import price growth are the sources of the currently elevated inflation. According to the forecast, headline inflation will stay slightly above the inflation target next year owing to an increase in both VAT rates by one percentage point. After this tax effect drops out in early 2014, it will fall slightly below the target. Monetary-policy relevant inflation will stay in the lower half of the tolerance band around the CNB’s target until the end of 2014, i.e. including at the monetary policy horizon.
Tomáš Holub, Executive Director, Monetary and Statistics Department