The CNB comments on the March 2009 inflation figures
Inflation comes in markedly above CNB forecast in March 2009
According to figures released today, annual inflation increased slightly in March 2009 compared to February, reaching 2.3%. This was its first increase after roughly six months, when the annual rate of consumer price inflation was slackening. Due to the increase in March, inflation was in 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, rose to 1.8% in March. Even despite its rise, it is below the lower boundary of the inflation-target tolerance band for the fourth consecutive month.
The price level picked up by 0.2% in March 2009 compared to the previous month. Month-on-month consumer price growth was mostly attributable to fuel prices, prices of net rents, cigarettes, wine and prices of new seasonal models of clothing and footwear. The seasonal decline in prices was affected by a seasonal fall in package holiday prices and a decline in prices of some kinds of food.
Headline annual inflation in March 2009 was 0.9 percentage point higher than the current CNB forecast. This was due to price developments in all three months of Q1 this year. According to preliminary calculations, this deviation was most attributable to food prices. Food prices do not still react as expected to the pronounced fall in world food prices and domestic agricultural producer prices and thus it cannot be ruled out that they will decrease further in the coming months. The deviation from the forecast resulted also from the lower annual decline in fuel prices due to the weaker-than-expected koruna´ s exchange rate against the euro and the dollar and higher prices of oil products on world exchanges. Conversely, adjusted inflation was slightly lower than expected by the CNB. The regulated price forecast proved to be broadly accurate.
Even despite the observed rise in inflation in March, the CNB expects inflation to decline almost to zero in the course of this year. However, in late 2009 and early 2010 inflation will start to gradually increase towards the new 2% target.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the March 2009 inflation figures
Inflation comes in markedly above CNB forecast in March 2009
According to figures released today, annual inflation increased slightly in March 2009 compared to February, reaching 2.3%. This was its first increase after roughly six months, when the annual rate of consumer price inflation was slackening. Due to the increase in March, inflation was in 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, rose to 1.8% in March. Even despite its rise, it is below the lower boundary of the inflation-target tolerance band for the fourth consecutive month.
The price level picked up by 0.2% in March 2009 compared to the previous month. Month-on-month consumer price growth was mostly attributable to fuel prices, prices of net rents, cigarettes, wine and prices of new seasonal models of clothing and footwear. The seasonal decline in prices was affected by a seasonal fall in package holiday prices and a decline in prices of some kinds of food.
Headline annual inflation in March 2009 was 0.9 percentage point higher than the current CNB forecast. This was due to price developments in all three months of Q1 this year. According to preliminary calculations, this deviation was most attributable to food prices. Food prices do not still react as expected to the pronounced fall in world food prices and domestic agricultural producer prices and thus it cannot be ruled out that they will decrease further in the coming months. The deviation from the forecast resulted also from the lower annual decline in fuel prices due to the weaker-than-expected koruna´ s exchange rate against the euro and the dollar and higher prices of oil products on world exchanges. Conversely, adjusted inflation was slightly lower than expected by the CNB. The regulated price forecast proved to be broadly accurate.
Even despite the observed rise in inflation in March, the CNB expects inflation to decline almost to zero in the course of this year. However, in late 2009 and early 2010 inflation will start to gradually increase towards the new 2% target.
Tomáš Holub, Executive Director, Monetary and Statistics Department