The CNB comments on the January 2009 inflation figures
Inflation fell below CNB target in January 2009
According to figures released today, annual inflation was 2.2% in January 2009, down by 1.4 percentage points from December 2008. In January, inflation thus continued the rapid decline recorded at the close of 2008, falling into the lower half 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, was below the lower boundary of the inflation-target tolerance band for the second consecutive month, reaching 1.6% year on year in January.
The price level rose by 1.5% in January 2009 compared to the previous month. This was due mainly to rising prices of electricity, heat and hot water, water supply and sewerage collection charges and net rents. Prices of some foods and beverages, prices of package holidays and insurance prices also increased. By contrast, a seasonal decline in prices of clothing and footwear, a continuing – albeit moderating – decrease in fuel prices and lower mobile phone prices exerted downward pressure on the price level.
Headline annual inflation in January 2009 was 0.4 percentage point higher than the current CNB forecast. According to preliminary calculations, inflation was higher than expected in January due to prices of food, regulated prices and fuel prices. By contrast, annual adjusted inflation excluding fuels was slightly lower than forecasted by the CNB.
It can be said that the sharp downward trend in annual inflation observed for several months culminated in January. This trend was due among other things to the unwinding of one-off cost factors that had caused the significant temporary increase in inflation in late 2007 and early 2008. A decrease in prices of energy-producing and food commodities on world markets, reflected in domestic prices of fuels and food, has also recently fostered lower inflation. In 2009, according to the latest CNB forecast, inflation will initially decline gradually almost to zero but start rising again at the end of the year and get close to the new inflation target of 2% at the start of 2010.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the January 2009 inflation figures
Inflation fell below CNB target in January 2009
According to figures released today, annual inflation was 2.2% in January 2009, down by 1.4 percentage points from December 2008. In January, inflation thus continued the rapid decline recorded at the close of 2008, falling into the lower half 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, was below the lower boundary of the inflation-target tolerance band for the second consecutive month, reaching 1.6% year on year in January.
The price level rose by 1.5% in January 2009 compared to the previous month. This was due mainly to rising prices of electricity, heat and hot water, water supply and sewerage collection charges and net rents. Prices of some foods and beverages, prices of package holidays and insurance prices also increased. By contrast, a seasonal decline in prices of clothing and footwear, a continuing – albeit moderating – decrease in fuel prices and lower mobile phone prices exerted downward pressure on the price level.
Headline annual inflation in January 2009 was 0.4 percentage point higher than the current CNB forecast. According to preliminary calculations, inflation was higher than expected in January due to prices of food, regulated prices and fuel prices. By contrast, annual adjusted inflation excluding fuels was slightly lower than forecasted by the CNB.
It can be said that the sharp downward trend in annual inflation observed for several months culminated in January. This trend was due among other things to the unwinding of one-off cost factors that had caused the significant temporary increase in inflation in late 2007 and early 2008. A decrease in prices of energy-producing and food commodities on world markets, reflected in domestic prices of fuels and food, has also recently fostered lower inflation. In 2009, according to the latest CNB forecast, inflation will initially decline gradually almost to zero but start rising again at the end of the year and get close to the new inflation target of 2% at the start of 2010.
Tomáš Holub, Executive Director, Monetary and Statistics Department