The CNB comments on the May 2009 inflation figures
Annual inflation still comes slightly above CNB forecast in May 2009
According to figures released today, annual inflation was 1.3 % in May 2009, falling markedly compared to April (1.8 %). As a result, inflation fell more significantly 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 May. At 1.2 % year on year, it was below the lower boundary of the inflation-target tolerance band for the sixth consecutive month.
The price level remained unchanged May 2009 compared to the previous month. According to the CZSO, this was due to contrary movements, when prices increased particularly for fuels, pharmaceuticals and seasonal spa vacation packages. A decline in prices of bread, bakery products, fruit and vegetables had an opposite effect on the price level.
Headline annual inflation – as in the previous month – was 0.1 percentage point higher than the current CNB forecast also in May, which can be assessed as only a slight deviation. According to CNB preliminary calculations, as in April, 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. The inflation slowdown 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 May 2009 inflation figures
Annual inflation still comes slightly above CNB forecast in May 2009
According to figures released today, annual inflation was 1.3 % in May 2009, falling markedly compared to April (1.8 %). As a result, inflation fell more significantly 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 May. At 1.2 % year on year, it was below the lower boundary of the inflation-target tolerance band for the sixth consecutive month.
The price level remained unchanged May 2009 compared to the previous month. According to the CZSO, this was due to contrary movements, when prices increased particularly for fuels, pharmaceuticals and seasonal spa vacation packages. A decline in prices of bread, bakery products, fruit and vegetables had an opposite effect on the price level.
Headline annual inflation – as in the previous month – was 0.1 percentage point higher than the current CNB forecast also in May, which can be assessed as only a slight deviation. According to CNB preliminary calculations, as in April, 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.
The inflation slowdown 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