The CNB comments on the June 2013 inflation figures
Inflation comes in slightly above CNB forecast in June
According to figures released today, the price level increased by 1.6% year on year in June 2013. Annual headline inflation thus went up compared to May. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also picked up in June, to 0.9%. This means it was just below the lower boundary of the tolerance band around the CNB’s target.
Annual headline inflation was 0.2 percentage point higher in June than the CNB’s current forecast. The upward deviation from the forecast was due exclusively to significantly higher-than-expected annual food price inflation. This was caused mainly by a very large year-on-year rise in potato prices due to exceptional seasonal factors. As regards the fulfilment of the CNB’s forecast, prices in the segment of adjusted inflation excluding fuels recorded a much deeper-than-expected annual decline in June, mainly reflecting falling prices of telecommunication services over the past few months. At the same time, contrary to the CNB’s assumptions, the January increase in excise duties on cigarettes has not yet passed through very significantly to prices. Slight downward deviations from the forecast were also observed for administered prices and fuel prices.
The published figures represent a contrary risk of non-fulfilment of the current forecast for the two main components of market prices, i.e. adjusted inflation excluding fuel prices and food prices. However, the impact on the outlook for inflation as a whole may not be substantial. In qualitative terms, the picture of the current economic situation and price pressures as described by the current forecast is broadly materialising. According to this forecast, current inflation reflects a moderation of the effect of tax changes, slowing growth in administered prices and continuing growth in food prices. Import prices are slightly inflationary owing to depreciation of the koruna. By contrast, the domestic economy is dampening inflation. The CNB’s forecast expects headline inflation to be slightly below the CNB’s 2% target this year despite substantial impacts of tax changes. Monetary-policy relevant inflation will be close to the lower boundary of the tolerance band this year and then return slowly to the target at the monetary policy horizon.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the June 2013 inflation figures
Inflation comes in slightly above CNB forecast in June
According to figures released today, the price level increased by 1.6% year on year in June 2013. Annual headline inflation thus went up compared to May. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also picked up in June, to 0.9%. This means it was just below the lower boundary of the tolerance band around the CNB’s target.
Annual headline inflation was 0.2 percentage point higher in June than the CNB’s current forecast. The upward deviation from the forecast was due exclusively to significantly higher-than-expected annual food price inflation. This was caused mainly by a very large year-on-year rise in potato prices due to exceptional seasonal factors. As regards the fulfilment of the CNB’s forecast, prices in the segment of adjusted inflation excluding fuels recorded a much deeper-than-expected annual decline in June, mainly reflecting falling prices of telecommunication services over the past few months. At the same time, contrary to the CNB’s assumptions, the January increase in excise duties on cigarettes has not yet passed through very significantly to prices. Slight downward deviations from the forecast were also observed for administered prices and fuel prices.
The published figures represent a contrary risk of non-fulfilment of the current forecast for the two main components of market prices, i.e. adjusted inflation excluding fuel prices and food prices. However, the impact on the outlook for inflation as a whole may not be substantial. In qualitative terms, the picture of the current economic situation and price pressures as described by the current forecast is broadly materialising. According to this forecast, current inflation reflects a moderation of the effect of tax changes, slowing growth in administered prices and continuing growth in food prices. Import prices are slightly inflationary owing to depreciation of the koruna. By contrast, the domestic economy is dampening inflation. The CNB’s forecast expects headline inflation to be slightly below the CNB’s 2% target this year despite substantial impacts of tax changes. Monetary-policy relevant inflation will be close to the lower boundary of the tolerance band this year and then return slowly to the target at the monetary policy horizon.
Tomáš Holub, Executive Director, Monetary and Statistics Department