The CNB comments on the October 2006 inflation figures
Inflation comes in slightly below CNB forecast
According to figures released today, annual inflation fell sharply to 1.3% in October 2006, from
2.7% in September. For the first time this year it thus deviated considerably from the CNB's 3%
target.
In month-on-month terms, the price level dropped by 0.5 percentage point in October. This was
partly due to a continuing seasonal decline in some food prices, package holiday prices, etc. In
addition, October saw a 5.5% decrease in regulated prices of natural gas. Fuel prices, reflecting
price movements on world markets, fell to the same extent. Bread prices decreased as well, thus
somewhat correcting the surge observed in previous months.
The current CNB forecast had expected a pronounced decrease in annual inflation in October. The
fall was mostly due to the unwinding of a large increase in regulated prices last October combined
with a fall in gas and fuel prices this October, which had also been expected. Regulated price
inflation and fuel price inflation was thus fully in line with the forecast in October.
Nonetheless, the overall slowdown in annual inflation of 0.2-0.3 percentage point was greater than
forecasted by the CNB. This forecast error was due in equal measure to food prices and adjusted
inflation excluding fuels. Year-on-year growth in both these price categories remains at low levels
.
Tomáš Holub
Executive Director, Monetary and Statistics Department
The CNB comments on the October 2006 inflation figures
Inflation comes in slightly below CNB forecast
According to figures released today, annual inflation fell sharply to 1.3% in October 2006, from 2.7% in September. For the first time this year it thus deviated considerably from the CNB's 3% target.
In month-on-month terms, the price level dropped by 0.5 percentage point in October. This was partly due to a continuing seasonal decline in some food prices, package holiday prices, etc. In addition, October saw a 5.5% decrease in regulated prices of natural gas. Fuel prices, reflecting price movements on world markets, fell to the same extent. Bread prices decreased as well, thus somewhat correcting the surge observed in previous months.
The current CNB forecast had expected a pronounced decrease in annual inflation in October. The fall was mostly due to the unwinding of a large increase in regulated prices last October combined with a fall in gas and fuel prices this October, which had also been expected. Regulated price inflation and fuel price inflation was thus fully in line with the forecast in October. Nonetheless, the overall slowdown in annual inflation of 0.2-0.3 percentage point was greater than forecasted by the CNB. This forecast error was due in equal measure to food prices and adjusted inflation excluding fuels. Year-on-year growth in both these price categories remains at low levels .
Tomáš Holub
Executive Director, Monetary and Statistics Department