The CNB comments on the July 2012 inflation figures
Inflation comes in below the CNB forecast in July 2012
According to figures released today, the price level increased by 3.1% year on year in July 2012. Annual headline inflation thus declined compared to June. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, fell to 1.8% in July and is thus in the lower half of the tolerance band around the 2%inflation target.
Annual headline inflation was 0.3 percentage point lower in July than the CNB’s current forecast. The downward deviation from the forecast was due to lower-than-expected annual growth in food prices and lower adjusted inflation excluding fuels, which remains negative. Administered prices and fuel prices 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. This year's rise in inflation has been due to several concurrent one-off factors, in particular the VAT change, growth in food prices and administered prices and the gradual pass-through of the earlier exchange rate depreciation to consumer prices. According to the forecast, headline inflation is expected to be just above 3% in the rest of 2012 as a result of the VAT increase. Headline inflation should fall to the CNB's target in late 2012/early 2013. Monetary-policy relevant inflation will be noticeably lower than headline inflation throughout this year owing to the VAT change, and is expected to decline below the target at the end of this year.
Petr Vojtíšek, Deputy Executive Director, Monetary and Statistics Department
The CNB comments on the July 2012 inflation figures
Inflation comes in below the CNB forecast in July 2012
According to figures released today, the price level increased by 3.1% year on year in July 2012. Annual headline inflation thus declined compared to June. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, fell to 1.8% in July and is thus in the lower half of the tolerance band around the 2%inflation target.
Annual headline inflation was 0.3 percentage point lower in July than the CNB’s current forecast. The downward deviation from the forecast was due to lower-than-expected annual growth in food prices and lower adjusted inflation excluding fuels, which remains negative. Administered prices and fuel prices 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. This year's rise in inflation has been due to several concurrent one-off factors, in particular the VAT change, growth in food prices and administered prices and the gradual pass-through of the earlier exchange rate depreciation to consumer prices. According to the forecast, headline inflation is expected to be just above 3% in the rest of 2012 as a result of the VAT increase. Headline inflation should fall to the CNB's target in late 2012/early 2013. Monetary-policy relevant inflation will be noticeably lower than headline inflation throughout this year owing to the VAT change, and is expected to decline below the target at the end of this year.
Petr Vojtíšek, Deputy Executive Director, Monetary and Statistics Department