The CNB comments on the May 2005 inflation figures
No major surprises in May inflation figures
According to data released today, annual consumer price inflation decreased in May by comparison
with April, reaching 1.3%. This decline was mainly due to the unwinding of the effect of excise tax
changes in May 2004 and a slowdown in annual growth in fuel prices. The CNB's April forecast had
expected a slightly larger decrease in annual inflation, to 1.1%.
The month-on-month inflation figure of 0.2% was generated by continuing growth in fuel prices,
which was later joined by growth in food prices. The rise in prices in these two components of the
consumer basket led to the above-mentioned deviation of actual inflation from the CNB's forecast.
The other components were consistent with the forecast.
In view of the high volatility of food and fuel prices, the price movements in these two items
should not be overestimated. The most important item from the point of view of monetary policy is
adjusted inflation excluding fuels. The month-on-month increase in this group in May was zero, in
line with the forecast. This confirms a persisting low-inflation environment and an absence of
demand-pull inflationary pressures in the Czech economy.
Tomáš Holub Executive Director, Monetary and Statistics Department
The CNB comments on the May 2005 inflation figures
No major surprises in May inflation figures
According to data released today, annual consumer price inflation decreased in May by comparison with April, reaching 1.3%. This decline was mainly due to the unwinding of the effect of excise tax changes in May 2004 and a slowdown in annual growth in fuel prices. The CNB's April forecast had expected a slightly larger decrease in annual inflation, to 1.1%.
The month-on-month inflation figure of 0.2% was generated by continuing growth in fuel prices, which was later joined by growth in food prices. The rise in prices in these two components of the consumer basket led to the above-mentioned deviation of actual inflation from the CNB's forecast. The other components were consistent with the forecast.
In view of the high volatility of food and fuel prices, the price movements in these two items should not be overestimated. The most important item from the point of view of monetary policy is adjusted inflation excluding fuels. The month-on-month increase in this group in May was zero, in line with the forecast. This confirms a persisting low-inflation environment and an absence of demand-pull inflationary pressures in the Czech economy.
Tomáš Holub
Executive Director, Monetary and Statistics Department