The CNB comments on the June 2009 inflation figures
Annual inflation comes in slightly below CNB forecast in July
According to figures released today, annual inflation reached 0.3% in July 2009, a significant decrease from the 1.2% recorded in June. This means that it was well 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 remained below the tolerance band, falling in parallel with headline inflation to 0.3% as well.
The price level declined by 0.4% in July 2009 compared to the previous month. The most significant declines were recorded for prices of food, particularly bread, milk, fruit and vegetables, and prices of natural gas. Prices of clothing and footwear and telecommunication services also fell. By contrast, the largest increase was recorded for package holiday prices, which are subject to considerable seasonal fluctuations.
Annual headline inflation in July 2009 was 0.2 percentage point lower than the current CNB forecast. This small deviation was due mainly to food prices and adjusted inflation excluding fuels. Food prices fell more sharply than forecasted. This was probably a lagged and intensified response to the significant decline in agricultural producer prices visible since the end of last year. The lower-than-forecasted adjusted inflation excluding fuels was due to slower growth in prices of non-tradables (i.e. mostly services). Regulated prices and fuel prices were broadly in line with the forecast.
The observed slowdown in inflation is consistent with the CNB’s expectations that inflation will remain low yet positive in the remainder of the year and at the start of 2010. It should rise gradually towards the new inflation target of 2% in 2010.
Tomáš Holub Executive Director, Monetary and Statistics Department
The CNB comments on the June 2009 inflation figures
Annual inflation comes in slightly below CNB forecast in July
According to figures released today, annual inflation reached 0.3% in July 2009, a significant decrease from the 1.2% recorded in June. This means that it was well 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 remained below the tolerance band, falling in parallel with headline inflation to 0.3% as well.
The price level declined by 0.4% in July 2009 compared to the previous month. The most significant declines were recorded for prices of food, particularly bread, milk, fruit and vegetables, and prices of natural gas. Prices of clothing and footwear and telecommunication services also fell. By contrast, the largest increase was recorded for package holiday prices, which are subject to considerable seasonal fluctuations.
Annual headline inflation in July 2009 was 0.2 percentage point lower than the current CNB forecast. This small deviation was due mainly to food prices and adjusted inflation excluding fuels. Food prices fell more sharply than forecasted. This was probably a lagged and intensified response to the significant decline in agricultural producer prices visible since the end of last year. The lower-than-forecasted adjusted inflation excluding fuels was due to slower growth in prices of non-tradables (i.e. mostly services). Regulated prices and fuel prices were broadly in line with the forecast.
The observed slowdown in inflation is consistent with the CNB’s expectations that inflation will remain low yet positive in the remainder of the year and at the start of 2010. It should rise gradually towards the new inflation target of 2% in 2010.
Tomáš Holub
Executive Director, Monetary and Statistics Department