The CNB comments on the December 2007 inflation figures
Inflation comes in markedly above CNB forecast for second consecutive month
According to figures released today, annual inflation increased to 5.4% in December 2007, from 5.0% in November last year. This means that, for the second consecutive month, it was above the upper boundary 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 more than 1 percentage point. Inflation adjusted for these effects – referred to as monetary policy-relevant inflation – therefore rose to around 4.3% in December and was thus also above the upper boundary of the tolerance band of the inflation target. According to the CZSO, the average inflation rate last year, as measured by consumer price index growth in 2007 compared to the 2006 average, was 2.8%, up by 0.3 percentage point on 2006.
In month-on-month terms, the price level increased by 0.5% in December 2007. This was due to a continued rise in prices of food, although the growth was considerably less intense than in November. Prices of most kinds of food rose again, with fruit, bread products and cereals, eggs, cheese and other dairy products, fats, oils, confectionary, coffee and cocoa showing the largest growth. As for the other categories, prices rose in transport owing to increases in fuel prices and rail fares. In the hotels and restaurants category, growth was mainly recorded in prices of restaurant meals and beer.
Annual inflation in December 2007 was 1.5 percentage points higher than the CNB’s October forecast. The deviation from the forecast recorded in November thus increased further in December. As in November, this deviation was due mainly to higher-than-expected growth in food prices. Fuel prices were also higher than forecasted. Adjusted inflation excluding fuels, regulated prices and the effects of indirect tax changes in December were broadly in line with the CNB’s forecast.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the December 2007 inflation figures
Inflation comes in markedly above CNB forecast for second consecutive month
According to figures released today, annual inflation increased to 5.4% in December 2007, from 5.0% in November last year. This means that, for the second consecutive month, it was above the upper boundary 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 more than 1 percentage point. Inflation adjusted for these effects – referred to as monetary policy-relevant inflation – therefore rose to around 4.3% in December and was thus also above the upper boundary of the tolerance band of the inflation target. According to the CZSO, the average inflation rate last year, as measured by consumer price index growth in 2007 compared to the 2006 average, was 2.8%, up by 0.3 percentage point on 2006.
In month-on-month terms, the price level increased by 0.5% in December 2007. This was due to a continued rise in prices of food, although the growth was considerably less intense than in November. Prices of most kinds of food rose again, with fruit, bread products and cereals, eggs, cheese and other dairy products, fats, oils, confectionary, coffee and cocoa showing the largest growth. As for the other categories, prices rose in transport owing to increases in fuel prices and rail fares. In the hotels and restaurants category, growth was mainly recorded in prices of restaurant meals and beer.
Annual inflation in December 2007 was 1.5 percentage points higher than the CNB’s October forecast. The deviation from the forecast recorded in November thus increased further in December. As in November, this deviation was due mainly to higher-than-expected growth in food prices. Fuel prices were also higher than forecasted. Adjusted inflation excluding fuels, regulated prices and the effects of indirect tax changes in December were broadly in line with the CNB’s forecast.
Tomáš Holub, Executive Director, Monetary and Statistics Department