The CNB comments on the February 2008 inflation figures
Inflation in February still above CNB forecast
According to figures released today, annual inflation was 7.5% in February, the same as in January. This means that it is significantly above the upper boundary of the tolerance band set by the CNB around its target of 3%. This was again largely due to changes to indirect taxes, whose first-round effect was more than 2 percentage points. However, inflation adjusted for the first-round effect of indirect tax changes – referred to as monetary policy-relevant inflation – was, as in January, noticeably above the upper boundary of the tolerance band of the inflation target.
In month-on-month terms, the price level increased by 0.3% in February 2008. The rise in inflation was chiefly due to housing prices, in particular rising water supply and sewerage collection charges and heat and hot water prices. The recreation and culture category recorded a seasonal increase in prices of domestic and foreign mountain holidays. Prices of some kinds of food, in particular bread and cereals, and restaurant prices increased as well. By contrast, a decrease in the price level was fostered by falling prices of fruit and vegetables, milk, butter, sugar and chocolate. Prices of fuels, clothing and footwear and electronic devices also decreased.
Annual inflation in February 2008 was 0.6 percentage point higher than the CNB’s current forecast (6.9%). This deviation was due to higher-than-expected adjusted inflation excluding fuels, higher growth in regulated prices and, to a lesser extent, higher food price inflation. By contrast, the rise in fuel prices in February was somewhat lower than forecasted.
The current extraordinarily high inflation can be viewed as a temporary swing caused chiefly by tax changes, rising regulated prices (including the introduction of regulatory fees for health care) and extraordinarily high food price inflation at the end of last year. Once this swing has subsided, inflation should return to low levels at the end of 2008 and the start of 2009, in line with the CNB’s targets.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the February 2008 inflation figures
Inflation in February still above CNB forecast
According to figures released today, annual inflation was 7.5% in February, the same as in January. This means that it is significantly above the upper boundary of the tolerance band set by the CNB around its target of 3%. This was again largely due to changes to indirect taxes, whose first-round effect was more than 2 percentage points. However, inflation adjusted for the first-round effect of indirect tax changes – referred to as monetary policy-relevant inflation – was, as in January, noticeably above the upper boundary of the tolerance band of the inflation target.
In month-on-month terms, the price level increased by 0.3% in February 2008. The rise in inflation was chiefly due to housing prices, in particular rising water supply and sewerage collection charges and heat and hot water prices. The recreation and culture category recorded a seasonal increase in prices of domestic and foreign mountain holidays. Prices of some kinds of food, in particular bread and cereals, and restaurant prices increased as well. By contrast, a decrease in the price level was fostered by falling prices of fruit and vegetables, milk, butter, sugar and chocolate. Prices of fuels, clothing and footwear and electronic devices also decreased.
Annual inflation in February 2008 was 0.6 percentage point higher than the CNB’s current forecast (6.9%). This deviation was due to higher-than-expected adjusted inflation excluding fuels, higher growth in regulated prices and, to a lesser extent, higher food price inflation. By contrast, the rise in fuel prices in February was somewhat lower than forecasted.
The current extraordinarily high inflation can be viewed as a temporary swing caused chiefly by tax changes, rising regulated prices (including the introduction of regulatory fees for health care) and extraordinarily high food price inflation at the end of last year. Once this swing has subsided, inflation should return to low levels at the end of 2008 and the start of 2009, in line with the CNB’s targets.
Tomáš Holub, Executive Director, Monetary and Statistics Department