The CNB comments on the July 2006 inflation figures
Inflation in line with CNB forecast
According to figures released today, annual inflation edged up to 2.9% in July from 2.8% in
June. Inflation was thus very close to the CNB's 3% target, as it has been all year.
In month-on-month terms, the price level increased by 0.4 percentage point in July. As usual,
some prices showed strong seasonality in the first holiday month. The start of the main summer
season generated a rise in prices of package holidays. By contrast, prices of seasonal clothes,
footwear and food decreased. This year, these traditional price movements were accompanied by a
continuing increase in bread prices. Fuel prices went up as well, owing to oil price developments
on world markets.
The figure released today is only slightly below the midpoint of the current CNB forecast. In
contrast with the forecast, the effect of the April excise tax increase has not yet passed through
to prices of tobacco products, at least as far as the representatives of these goods in the
consumer basket are concerned. Growth in regulated prices and fuel prices was just below the
forecast. According to preliminary calculations, adjusted inflation excluding fuels was also
somewhat lower than forecasted, reflecting among other things the substantial year-on-year
appreciation of the koruna in recent months. Consequently, only food prices were higher than
forecasted.
Tomáš Holub
Executive Director, Monetary and Statistics Department
The CNB comments on the July 2006 inflation figures
Inflation in line with CNB forecast
According to figures released today, annual inflation edged up to 2.9% in July from 2.8% in June. Inflation was thus very close to the CNB's 3% target, as it has been all year.
In month-on-month terms, the price level increased by 0.4 percentage point in July. As usual, some prices showed strong seasonality in the first holiday month. The start of the main summer season generated a rise in prices of package holidays. By contrast, prices of seasonal clothes, footwear and food decreased. This year, these traditional price movements were accompanied by a continuing increase in bread prices. Fuel prices went up as well, owing to oil price developments on world markets.
The figure released today is only slightly below the midpoint of the current CNB forecast. In contrast with the forecast, the effect of the April excise tax increase has not yet passed through to prices of tobacco products, at least as far as the representatives of these goods in the consumer basket are concerned. Growth in regulated prices and fuel prices was just below the forecast. According to preliminary calculations, adjusted inflation excluding fuels was also somewhat lower than forecasted, reflecting among other things the substantial year-on-year appreciation of the koruna in recent months. Consequently, only food prices were higher than forecasted.
Tomáš Holub
Executive Director, Monetary and Statistics Department