The CNB comments on the August 2010 inflation figures
Inflation comes in just below the CNB forecast
According to figures released today, the price level increased by 1.9% year on year in August 2010. Headline inflation was unchanged from July and is close to the CNB’s inflation target of 2%. At 0.8%, monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, remains below the lower boundary of the tolerance band around the inflation target.
Annual headline inflation was 0.1 percentage point lower in August 2010 than in the CNB’s current forecast. This minor deviation from the forecast was due both to slower-than-expected growth in regulated prices – recorded as early as July – and to slightly lower net inflation. Within net inflation, food prices recorded somewhat slower growth and adjusted inflation excluding fuels was slightly lower than expected by the CNB.
The August data suggest that the forecast for the third quarter of this year is largely materialising. The forecast expects inflation to rise above the CNB’s inflation target in the final quarter of this year. At the beginning of next year, however, inflation should fall back towards the 2% inflation target as the effects of changes to indirect taxes in effect since January 2010 gradually unwind. In the remainder of this year and next year, monetary-policy relevant inflation will gradually increase, converging to the inflation target in the second half of 2011.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the August 2010 inflation figures
Inflation comes in just below the CNB forecast
According to figures released today, the price level increased by 1.9% year on year in August 2010. Headline inflation was unchanged from July and is close to the CNB’s inflation target of 2%. At 0.8%, monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, remains below the lower boundary of the tolerance band around the inflation target.
Annual headline inflation was 0.1 percentage point lower in August 2010 than in the CNB’s current forecast. This minor deviation from the forecast was due both to slower-than-expected growth in regulated prices – recorded as early as July – and to slightly lower net inflation. Within net inflation, food prices recorded somewhat slower growth and adjusted inflation excluding fuels was slightly lower than expected by the CNB.
The August data suggest that the forecast for the third quarter of this year is largely materialising. The forecast expects inflation to rise above the CNB’s inflation target in the final quarter of this year. At the beginning of next year, however, inflation should fall back towards the 2% inflation target as the effects of changes to indirect taxes in effect since January 2010 gradually unwind. In the remainder of this year and next year, monetary-policy relevant inflation will gradually increase, converging to the inflation target in the second half of 2011.
Tomáš Holub, Executive Director, Monetary and Statistics Department