The CNB comments on the October 2009 inflation figures
October inflation roughly in line with CNB forecast
According to figures released today, the price level declined by 0.2% year on year in October. This means that inflation, which turned negative for the first time since August 2003, moved well below the lower boundary of the tolerance band set by the CNB around its target of 3%.
Annual headline inflation in October 2009 was 0.1 percentage point higher than the current CNB forecast. This overall minor deviation of October inflation from the forecast was due to mixed developments in the individual segments of the consumer basket. Adjusted inflation excluding fuels was somewhat higher than expected by the CNB, whereas food prices surprised in the opposite direction. Food prices thus seem to continue to react strongly to the long-term significant decline in agricultural producer prices. Despite the fact that the CNB’s expectations of the evolution of the main items of regulated prices materialised, regulated prices were generally slightly higher than forecasted. Fuel prices developed roughly in line with the forecast.
Price developments observed in October were in line with the message of the current forecast. According to this forecast, inflation should be very low in the last quarter of this year, but the price level should not decrease further year on year in November and December. The CNB expects headline inflation to increase gradually during 2010 and stand slightly above the 2% inflation target at the year-end. Monetary-policy relevant inflation will move below headline inflation owing to an increase in indirect taxes, and will thus gradually approach the CNB target from below.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the October 2009 inflation figures
October inflation roughly in line with CNB forecast
According to figures released today, the price level declined by 0.2% year on year in October. This means that inflation, which turned negative for the first time since August 2003, moved well below the lower boundary of the tolerance band set by the CNB around its target of 3%.
Annual headline inflation in October 2009 was 0.1 percentage point higher than the current CNB forecast. This overall minor deviation of October inflation from the forecast was due to mixed developments in the individual segments of the consumer basket. Adjusted inflation excluding fuels was somewhat higher than expected by the CNB, whereas food prices surprised in the opposite direction. Food prices thus seem to continue to react strongly to the long-term significant decline in agricultural producer prices. Despite the fact that the CNB’s expectations of the evolution of the main items of regulated prices materialised, regulated prices were generally slightly higher than forecasted. Fuel prices developed roughly in line with the forecast.
Price developments observed in October were in line with the message of the current forecast. According to this forecast, inflation should be very low in the last quarter of this year, but the price level should not decrease further year on year in November and December. The CNB expects headline inflation to increase gradually during 2010 and stand slightly above the 2% inflation target at the year-end. Monetary-policy relevant inflation will move below headline inflation owing to an increase in indirect taxes, and will thus gradually approach the CNB target from below.
Tomáš Holub, Executive Director, Monetary and Statistics Department