The CNB comments on the September 2008 inflation figures
Inflation comes in below the CNB forecast in September
According to figures released today, annual inflation reached 6.6% in September 2008, slightly (0.1 percentage point) higher than in August. This means that it was again well above the upper boundary of the tolerance band set by the CNB around its target of 3%. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also continues to fluctuate above the upper boundary of the inflation-target tolerance band, reaching 4.8% year on year in September. The first-round effects of changes to indirect taxes thus contributed almost two percentage points to headline inflation in September.
In month-on-month terms, the price level fell by 0.2% in September 2008, mainly due to a seasonal decrease in prices of package holidays, a continuing decline in fuel prices, a decrease in prices of some kinds of food and lower prices of roaming services. A further increase in prices of tobacco products, due to the lagged effect of the rise in excise duty, and a seasonal increase in clothing and footwear prices had an opposite effect on the price level. Net rents, prices of solid fuels and prices in the education category also recorded increases.
Headline annual inflation in September 2008 was 0.4 percentage point lower than the current CNB forecast. According to preliminary calculations, this deviation was caused primarily by fuel and food prices, which have been noticeably below the forecast since August. Conversely, adjusted inflation excluding fuel prices was slightly higher than the CNB forecast.
The developments in September confirmed the CNB’s assumption that annual inflation would rise slightly again this month, mainly because of the fading pass-through of increased excise duties to prices of cigarettes. However, according to the CNB forecast, inflation will slow in the last quarter of this year and fall back in 2009 to low levels consistent with the CNB’s targets. This will be aided by the unwinding of inflationary shocks observed at the turn of this year, the ongoing decline in economic growth and the recent rapid appreciation of the koruna.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the September 2008 inflation figures
Inflation comes in below the CNB forecast in September
According to figures released today, annual inflation reached 6.6% in September 2008, slightly (0.1 percentage point) higher than in August. This means that it was again well above the upper boundary of the tolerance band set by the CNB around its target of 3%. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also continues to fluctuate above the upper boundary of the inflation-target tolerance band, reaching 4.8% year on year in September. The first-round effects of changes to indirect taxes thus contributed almost two percentage points to headline inflation in September.
In month-on-month terms, the price level fell by 0.2% in September 2008, mainly due to a seasonal decrease in prices of package holidays, a continuing decline in fuel prices, a decrease in prices of some kinds of food and lower prices of roaming services. A further increase in prices of tobacco products, due to the lagged effect of the rise in excise duty, and a seasonal increase in clothing and footwear prices had an opposite effect on the price level. Net rents, prices of solid fuels and prices in the education category also recorded increases.
Headline annual inflation in September 2008 was 0.4 percentage point lower than the current CNB forecast. According to preliminary calculations, this deviation was caused primarily by fuel and food prices, which have been noticeably below the forecast since August. Conversely, adjusted inflation excluding fuel prices was slightly higher than the CNB forecast.
The developments in September confirmed the CNB’s assumption that annual inflation would rise slightly again this month, mainly because of the fading pass-through of increased excise duties to prices of cigarettes. However, according to the CNB forecast, inflation will slow in the last quarter of this year and fall back in 2009 to low levels consistent with the CNB’s targets. This will be aided by the unwinding of inflationary shocks observed at the turn of this year, the ongoing decline in economic growth and the recent rapid appreciation of the koruna.
Tomáš Holub, Executive Director, Monetary and Statistics Department