The CNB comments on the June 2006 inflation figures
Inflation remains slightly above the CNB's April forecast
According to figures released today, annual inflation fell to 2.8% in June 2006 from 3.1% in
May. In recent months, inflation has thus been fluctuating close to the CNB's 3% target.
In month-on-month terms, the price level increased by 0.3 percentage point in June. Some food
prices recorded larger movements. An increase in bread prices, which, unlike the other price
movements, cannot be attributed to the usual seasonality, is worth mentioning. This is a one-off
factor whose emergence was not signalled until the CNB's April forecast had been completed. By
contrast, fuel prices, which have otherwise been quite volatile recently, did not change
significantly.
The downswing in annual inflation in June was due mainly to last year's base effects in the
areas of telecommunication services and fuels. The CNB's April forecast had therefore anticipated
this reduction in annual inflation. However, annual inflation is still 0.3 percentage point higher
than the forecast. The biggest deviation from the forecast was recorded by food prices, largely as
a result of the aforementioned increase in bread prices. Annual regulated price inflation was also
slightly higher than forecasted, owing to a rise in telecommunication prices in May. The other
deviations from the forecast can be considered small and mutually offsetting. Annual adjusted
inflation excluding fuels remains very low. This is due mainly to the exchange rate of the koruna,
which fluctuated at stronger values during the second quarter of this year by comparison with the
April forecast.
Tomáš Holub
Executive Director, Monetary and Statistics Department
The CNB comments on the June 2006 inflation figures
Inflation remains slightly above the CNB's April forecast
According to figures released today, annual inflation fell to 2.8% in June 2006 from 3.1% in May. In recent months, inflation has thus been fluctuating close to the CNB's 3% target.
In month-on-month terms, the price level increased by 0.3 percentage point in June. Some food prices recorded larger movements. An increase in bread prices, which, unlike the other price movements, cannot be attributed to the usual seasonality, is worth mentioning. This is a one-off factor whose emergence was not signalled until the CNB's April forecast had been completed. By contrast, fuel prices, which have otherwise been quite volatile recently, did not change significantly.
The downswing in annual inflation in June was due mainly to last year's base effects in the areas of telecommunication services and fuels. The CNB's April forecast had therefore anticipated this reduction in annual inflation. However, annual inflation is still 0.3 percentage point higher than the forecast. The biggest deviation from the forecast was recorded by food prices, largely as a result of the aforementioned increase in bread prices. Annual regulated price inflation was also slightly higher than forecasted, owing to a rise in telecommunication prices in May. The other deviations from the forecast can be considered small and mutually offsetting. Annual adjusted inflation excluding fuels remains very low. This is due mainly to the exchange rate of the koruna, which fluctuated at stronger values during the second quarter of this year by comparison with the April forecast.
Tomáš Holub
Executive Director, Monetary and Statistics Department