The CNB comments on the March 2008 inflation figures
Inflation slowed to just above CNB forecast in March
According to figures released today, annual inflation was 7.1% in March 2008, down by 0.4 percentage point compared to the previous two months. This means that it is still significantly above the upper boundary of the tolerance band set by the CNB around its target of 3%. As in January and February, monetary policy-relevant inflation, i.e. inflation adjusted for the still sizeable first-round effect of indirect tax changes (around 2 percentage points), was also noticeably above the upper boundary of the tolerance band for the inflation target.
In month-on-month terms, the price level decreased by 0.1% in March 2008. This was due chiefly to a decline in prices of food and non-alcoholic beverages. Prices also dropped in the category of alcoholic beverages and tobacco. As usual, prices of recreation and culture fell owing to a decrease in package holiday prices at the end of the winter season. By contrast, a pick-up in prices of housing and clothing and footwear exerted upward pressure on the price level. Prices in restaurants and canteens grew as well.
Annual inflation in March 2008 was 0.2 percentage point higher than the CNB’s current forecast (6.9%). This deviation was due to higher-than-expected growth in regulated prices and adjusted inflation excluding fuels. This effect was partly moderated by lower-than-forecasted food price inflation and a lagged impact of increased excise duty on cigarette prices.
The current extraordinarily high inflation can still be viewed as a temporary swing caused chiefly by tax changes, rising regulated prices (including regulatory fees in health care) and extraordinarily high food price growth 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 March 2008 inflation figures
Inflation slowed to just above CNB forecast in March
According to figures released today, annual inflation was 7.1% in March 2008, down by 0.4 percentage point compared to the previous two months. This means that it is still significantly above the upper boundary of the tolerance band set by the CNB around its target of 3%. As in January and February, monetary policy-relevant inflation, i.e. inflation adjusted for the still sizeable first-round effect of indirect tax changes (around 2 percentage points), was also noticeably above the upper boundary of the tolerance band for the inflation target.
In month-on-month terms, the price level decreased by 0.1% in March 2008. This was due chiefly to a decline in prices of food and non-alcoholic beverages. Prices also dropped in the category of alcoholic beverages and tobacco. As usual, prices of recreation and culture fell owing to a decrease in package holiday prices at the end of the winter season. By contrast, a pick-up in prices of housing and clothing and footwear exerted upward pressure on the price level. Prices in restaurants and canteens grew as well.
Annual inflation in March 2008 was 0.2 percentage point higher than the CNB’s current forecast (6.9%). This deviation was due to higher-than-expected growth in regulated prices and adjusted inflation excluding fuels. This effect was partly moderated by lower-than-forecasted food price inflation and a lagged impact of increased excise duty on cigarette prices.
The current extraordinarily high inflation can still be viewed as a temporary swing caused chiefly by tax changes, rising regulated prices (including regulatory fees in health care) and extraordinarily high food price growth 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