The CNB comments on the February 2007 inflation figures
Inflation remains below CNB forecast
According to figures released today, annual inflation rose to 1.5% in February 2007, from 1.3%
in January. It thus remains below the lower boundary of the tolerance band set by the CNB around
its target of 3%.
The price level rose by 0.3% month on month in February, among other things due to the lagged
price impact of the changes to indirect taxes on tobacco products in April last year. A
predominantly seasonal increase in prices in the categories of housing and recreation and culture
acted on the price level in the same direction. The decline in fuel prices, which has now lasted
six months - had the opposite effect on consumer price inflation.
By comparison with the January forecast, annual inflation was around 0.3 percentage point
lower in February 2007. As in the previous month, the comparison of the reality with the forecast
was complicated by the switch to a new consumer basket in January 2007; this was not available at
the time the forecast was prepared. According to CNB analyses, the weight in the new basket of
items which in the past had systematically showed faster-than-average price growth (regulated
prices) has decreased, and conversely the share of representatives with lower inflation
(particularly tradables within adjusted inflation excluding fuels) has increased. This might shift
the outlook for inflation somewhat down.
Food prices rose faster in February 2007 than predicted in the CNB's forecast. The decline in
fuel prices in February was more pronounced than had been forecasted. The contribution of regulated
prices to inflation was also slightly lower, mainly because of a smaller-than-expected increase in
regulated rents. The biggest downward deviation from the forecast was recorded for adjusted
inflation excluding fuels, which remains very low. This suggests that the current inflation
pressures from the real economy remain moderate.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the February 2007 inflation figures
Inflation remains below CNB forecast
According to figures released today, annual inflation rose to 1.5% in February 2007, from 1.3% in January. It thus remains below the lower boundary of the tolerance band set by the CNB around its target of 3%.
The price level rose by 0.3% month on month in February, among other things due to the lagged price impact of the changes to indirect taxes on tobacco products in April last year. A predominantly seasonal increase in prices in the categories of housing and recreation and culture acted on the price level in the same direction. The decline in fuel prices, which has now lasted six months - had the opposite effect on consumer price inflation.
By comparison with the January forecast, annual inflation was around 0.3 percentage point lower in February 2007. As in the previous month, the comparison of the reality with the forecast was complicated by the switch to a new consumer basket in January 2007; this was not available at the time the forecast was prepared. According to CNB analyses, the weight in the new basket of items which in the past had systematically showed faster-than-average price growth (regulated prices) has decreased, and conversely the share of representatives with lower inflation (particularly tradables within adjusted inflation excluding fuels) has increased. This might shift the outlook for inflation somewhat down.
Food prices rose faster in February 2007 than predicted in the CNB's forecast. The decline in fuel prices in February was more pronounced than had been forecasted. The contribution of regulated prices to inflation was also slightly lower, mainly because of a smaller-than-expected increase in regulated rents. The biggest downward deviation from the forecast was recorded for adjusted inflation excluding fuels, which remains very low. This suggests that the current inflation pressures from the real economy remain moderate.
Tomáš Holub, Executive Director, Monetary and Statistics Department