The CNB comments on the July 2005 inflation figures
Annual consumer price inflation eased slightly
According to figures released today, annual consumer price inflation decreased slightly in July
by comparison with June, reaching 1.7%. This result was lower than the CNB's new forecast, which
had predicted annual consumer price inflation of 2%.
The month-on-month inflation of 0.3% was due mainly to a seasonal increase in package holiday
prices, continuing growth in fuel prices (connected with oil price developments on world markets)
and rising telecommunications prices. Their impact on overall consumer price inflation was reduced
by a decline in prices of food and non-alcoholic beverages and some other consumer basket
items.
The main factor underlying the slower July month-on-month and annual consumer price inflation
than forecasted by the CNB was lower growth in prices in the category of adjusted inflation
excluding fuels (in particular, the annual decline in clothing and footwear prices deepened, and
growth in hotel and restaurant service prices slowed more markedly). The price developments in this
category, which are the most significant as regards monetary policy, confirmed a persisting
low-inflation environment and the absence of demand pressures in the Czech economy. Food prices
fell again year on year, although, just like regulated prices, they developed in line with the
CNB's forecast.
Petr Vojtíšek, Deputy Executive Director, Monetary and Statistics Department
The CNB comments on the July 2005 inflation figures
Annual consumer price inflation eased slightly
According to figures released today, annual consumer price inflation decreased slightly in July by comparison with June, reaching 1.7%. This result was lower than the CNB's new forecast, which had predicted annual consumer price inflation of 2%.
The month-on-month inflation of 0.3% was due mainly to a seasonal increase in package holiday prices, continuing growth in fuel prices (connected with oil price developments on world markets) and rising telecommunications prices. Their impact on overall consumer price inflation was reduced by a decline in prices of food and non-alcoholic beverages and some other consumer basket items.
The main factor underlying the slower July month-on-month and annual consumer price inflation than forecasted by the CNB was lower growth in prices in the category of adjusted inflation excluding fuels (in particular, the annual decline in clothing and footwear prices deepened, and growth in hotel and restaurant service prices slowed more markedly). The price developments in this category, which are the most significant as regards monetary policy, confirmed a persisting low-inflation environment and the absence of demand pressures in the Czech economy. Food prices fell again year on year, although, just like regulated prices, they developed in line with the CNB's forecast.
Petr Vojtíšek, Deputy Executive Director, Monetary and Statistics Department