The CNB comments on the March 2005 inflation figures

Price developments influenced by food prices and the exchange rate

According to figures released today, consumer prices increased by 1.5% year on year in March. This confirms that inflation is moderate at the beginning of this year and will remain below 2% year on year for some time.

Prices dropped by 0.1% compared to February, which was in line with the CNB´s current forecast. Fuel prices were higher than forecasted due to developments in world oil prices, but this deviation was offset by other non-food prices.

Annual inflation remains slightly below the CNB´s forecast, pushed downwards mainly by a slowdown in food prices and an appreciation of the exchange rate. These influences outweigh the impacts of expensive oil. Newly available data does not indicate that demand-pull inflationary pressures are present in the Czech economy.

Tomáš Holub
Executive Director, Monetary and Statistics Department