The CNB comments on the June 2010 inflation figures
Inflation still slightly above the CNB forecast
According to figures released today, the price level increased by 1.2% year on year in June 2010. Inflation thus remains in the lower half of the tolerance band around 2% of the CNB´ s inflation target. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, was 0.1% in June 2010.
Annual headline inflation was 0.3 percentage point higher in June 2010 than the CNB’ s current forecast. Though the central bank forecasted a moderate pick-up in annual CPI inflation in Q2 this year, in fact it was somewhat more striking. This deviation of the actual figure from the June forecast was, to a large extent, given by the development in April and May this year. The main reason for this deviation thus remains higher-than-expected annual fuel price inflation. As in the past two months, annual growth in regulated prices was also higher than forecasted. The forecast for the effects of indirect tax changes, food prices and adjusted inflation excluding fuels proved to be accurate. Adjusted inflation excluding fuels is still markedly negative in year-on-year terms, reflecting thus the current anti-inflationary effect of import prices and subdued inflationary pressures from the domestic economy.
The deviation of actual inflation from the CNB´ s forecast remains modest also in June and, in addition, it concerns a limited number of the consumer basket items with generally volatile prices, and so no doubt is cast on the forecast in general by figures released today. Headline inflation will continue to gradually rise this year up to slightly above the CNB´ s inflation target of 2%, which it will exceed over the short term owing, among other things, to the effect of indirect tax changes. In 2011, inflation will fall slightly below the target. Monetary-policy relevant inflation will lie below headline inflation at first, and at the monetary policy inflation it will approach the target from below.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the June 2010 inflation figures
Inflation still slightly above the CNB forecast
According to figures released today, the price level increased by 1.2% year on year in June 2010. Inflation thus remains in the lower half of the tolerance band around 2% of the CNB´ s inflation target. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, was 0.1% in June 2010.
Annual headline inflation was 0.3 percentage point higher in June 2010 than the CNB’ s current forecast. Though the central bank forecasted a moderate pick-up in annual CPI inflation in Q2 this year, in fact it was somewhat more striking. This deviation of the actual figure from the June forecast was, to a large extent, given by the development in April and May this year. The main reason for this deviation thus remains higher-than-expected annual fuel price inflation. As in the past two months, annual growth in regulated prices was also higher than forecasted. The forecast for the effects of indirect tax changes, food prices and adjusted inflation excluding fuels proved to be accurate. Adjusted inflation excluding fuels is still markedly negative in year-on-year terms, reflecting thus the current anti-inflationary effect of import prices and subdued inflationary pressures from the domestic economy.
The deviation of actual inflation from the CNB´ s forecast remains modest also in June and, in addition, it concerns a limited number of the consumer basket items with generally volatile prices, and so no doubt is cast on the forecast in general by figures released today. Headline inflation will continue to gradually rise this year up to slightly above the CNB´ s inflation target of 2%, which it will exceed over the short term owing, among other things, to the effect of indirect tax changes. In 2011, inflation will fall slightly below the target. Monetary-policy relevant inflation will lie below headline inflation at first, and at the monetary policy inflation it will approach the target from below.
Tomáš Holub, Executive Director, Monetary and Statistics Department