The CNB comments on the April 2009 inflation figures
Annual inflation comes in slightly above CNB forecast in April 2009
According to figures released today, annual inflation was 1.8% in April 2009, falling markedly compared to March (2.3%). As a result, inflation was below the lower 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 decreased in April. At 1.5% year on year, it was below the lower boundary of the inflation-target tolerance band for the fifth consecutive month.
The price level declined by 0.1% in April 2009 compared to the previous month. According to the CZSO, the month-on-month decrease in consumer prices was chiefly due to prices of food and non-alcoholic beverages. A decline in prices in the health category – due to changes in regulatory fees for visits to the doctor and to a reduction in supplementary payments for medicines – acted in the same direction. Natural gas prices decreased as well. Rising prices in transport and a seasonal increase in clothing and footwear prices had an opposite effect on the price level.
Headline annual inflation in April 2009 was 0.1 percentage point higher than the current CNB forecast. According to preliminary calculations, this minor deviation was due to higher fuel prices and adjusted inflation excluding fuels. By contrast, food prices and regulated prices were lower than forecasted by the CNB. Food prices thus seem to have started reacting more noticeably to the sharp fall in world food prices and domestic agricultural producer prices; the CNB had drawn attention to this possibility in the past.
Overall, the inflation slowdown observed in April is in line with CNB expectations that inflation will fall further in the course of this year, but will remain positive. In 2010, inflation will start rising gradually towards the new 2% target.
Tomáš Holub Executive Director, Monetary and Statistics Department
The CNB comments on the April 2009 inflation figures
Annual inflation comes in slightly above CNB forecast in April 2009
According to figures released today, annual inflation was 1.8% in April 2009, falling markedly compared to March (2.3%). As a result, inflation was below the lower 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 decreased in April. At 1.5% year on year, it was below the lower boundary of the inflation-target tolerance band for the fifth consecutive month.
The price level declined by 0.1% in April 2009 compared to the previous month. According to the CZSO, the month-on-month decrease in consumer prices was chiefly due to prices of food and non-alcoholic beverages. A decline in prices in the health category – due to changes in regulatory fees for visits to the doctor and to a reduction in supplementary payments for medicines – acted in the same direction. Natural gas prices decreased as well. Rising prices in transport and a seasonal increase in clothing and footwear prices had an opposite effect on the price level.
Headline annual inflation in April 2009 was 0.1 percentage point higher than the current CNB forecast. According to preliminary calculations, this minor deviation was due to higher fuel prices and adjusted inflation excluding fuels. By contrast, food prices and regulated prices were lower than forecasted by the CNB. Food prices thus seem to have started reacting more noticeably to the sharp fall in world food prices and domestic agricultural producer prices; the CNB had drawn attention to this possibility in the past.
Overall, the inflation slowdown observed in April is in line with CNB expectations that inflation will fall further in the course of this year, but will remain positive. In 2010, inflation will start rising gradually towards the new 2% target.
Tomáš Holub
Executive Director, Monetary and Statistics Department