The CNB comments on the November 2005 inflation figures
Inflation comes in lower than expected by the CNB
According to figures released today, annual inflation slowed modestly in November, to 2.4%.
However, it remains in the lower half of the CNB's target band.
In month-on-month terms, the price level decreased by 0.3 percentage point compared to October.
This decline was due to seasonal movements in prices of some consumer goods and in particular to a
drop of more than 5% in fuel prices. Fuel prices were affected by oil prices on world markets and
by a gradual correction of the previous step increase in petrol prices in September this year.
Annual inflation was almost half a percentage point lower than predicted in the CNB's October
forecast, which had foreseen a continuing gradual pick-up in inflation. Underlying this relatively
big difference was a combination of several partial deviations from the forecast, all going in the
same direction. The fact that the increase in excise duties has yet to pass through strongly into
prices of tobacco products had the largest effect. The lower-than-expected fuel prices also had a
significant effect. However, growth in food prices and adjusted inflation excluding fuels were also
slightly below the forecast. The evolution of adjusted inflation confirms that there are still no
demand-pull inflation pressures in the economy, and the koruna's exchange rate is also having an
anti-inflationary effect.
Tomáš Holub
Executive Director, Monetary and Statistics Department
The CNB comments on the November 2005 inflation figures
Inflation comes in lower than expected by the CNB
According to figures released today, annual inflation slowed modestly in November, to 2.4%. However, it remains in the lower half of the CNB's target band.
In month-on-month terms, the price level decreased by 0.3 percentage point compared to October. This decline was due to seasonal movements in prices of some consumer goods and in particular to a drop of more than 5% in fuel prices. Fuel prices were affected by oil prices on world markets and by a gradual correction of the previous step increase in petrol prices in September this year.
Annual inflation was almost half a percentage point lower than predicted in the CNB's October forecast, which had foreseen a continuing gradual pick-up in inflation. Underlying this relatively big difference was a combination of several partial deviations from the forecast, all going in the same direction. The fact that the increase in excise duties has yet to pass through strongly into prices of tobacco products had the largest effect. The lower-than-expected fuel prices also had a significant effect. However, growth in food prices and adjusted inflation excluding fuels were also slightly below the forecast. The evolution of adjusted inflation confirms that there are still no demand-pull inflation pressures in the economy, and the koruna's exchange rate is also having an anti-inflationary effect.
Tomáš Holub
Executive Director, Monetary and Statistics Department