The CNB comments on the July 2007 inflation figures
Inflation below CNB forecast
According to figures released today, annual inflation decreased from 2.5% in June to 2.3% in
July this year. This means that it is in the lower half of the tolerance band set by the CNB around
its target of 3%. The contribution of the first-round effects of indirect tax changes to annual
inflation was around 0.6 percentage point. Inflation adjusted for these effects - known as
"monetary policy-relevant inflation" - thus decreased to roughly 1.7% in July.
In month-on-month terms, the price level increased by 0.4% in July. Some prices always show a
high level of seasonality in the first holiday month of the year. Prices of package holidays rose,
whereas prices of some kinds of food and prices of clothing and footwear fell. In addition to these
usual price movements, inflation in July was affected by growth in regulated rents, a continuing
rise in fuel prices and an increase in prices of tobacco products stemming from previous changes in
excise duty.
Annual inflation in July 2007 was approximately 0.2 percentage point lower than the July CNB
forecast. This deviation was due exclusively to lower adjusted inflation excluding fuels,
particularly prices of foreign package holidays, which increased by less than would correspond to
the usual seasonality. By contrast, food prices and regulated prices rose somewhat faster than
forecasted, and the effect of changes to indirect taxes was slightly higher as well. Fuel prices
were in line with the forecast in July.
Petr Vojtíšek, Deputy Executive Director, Monetary and Statistics Department
The CNB comments on the July 2007 inflation figures
Inflation below CNB forecast
According to figures released today, annual inflation decreased from 2.5% in June to 2.3% in July this year. This means that it is in the lower half of the tolerance band set by the CNB around its target of 3%. The contribution of the first-round effects of indirect tax changes to annual inflation was around 0.6 percentage point. Inflation adjusted for these effects - known as "monetary policy-relevant inflation" - thus decreased to roughly 1.7% in July.
In month-on-month terms, the price level increased by 0.4% in July. Some prices always show a high level of seasonality in the first holiday month of the year. Prices of package holidays rose, whereas prices of some kinds of food and prices of clothing and footwear fell. In addition to these usual price movements, inflation in July was affected by growth in regulated rents, a continuing rise in fuel prices and an increase in prices of tobacco products stemming from previous changes in excise duty.
Annual inflation in July 2007 was approximately 0.2 percentage point lower than the July CNB forecast. This deviation was due exclusively to lower adjusted inflation excluding fuels, particularly prices of foreign package holidays, which increased by less than would correspond to the usual seasonality. By contrast, food prices and regulated prices rose somewhat faster than forecasted, and the effect of changes to indirect taxes was slightly higher as well. Fuel prices were in line with the forecast in July.
Petr Vojtíšek, Deputy Executive Director, Monetary and Statistics Department