The CNB comments on the December 2009 inflation figures
Inflation comes in above CNB forecast at end of 2009
According to figures released today, the price level increased by 1.0% year on year in December 2009. Inflation thus rose further after recording a figure of 0.5% in November. Despite this increase, inflation was below the lower boundary of the tolerance band around the 3% target valid until the end of 2009. Compared to the new inflation target of 2% in effect since the beginning of 2010, inflation was at the lower boundary of the tolerance band.
Compared to the current CNB forecast, annual headline inflation in December 2009 was 0.5 percentage point higher. A large part of this deviation had occurred in the previous two months. The deviation of the December inflation figure from the forecast was due mainly to higher fuel prices as a result of rising oil prices, a smaller-than-expected decline in food prices and a smaller fall in the core component of inflation – adjusted inflation excluding fuels. The deviation was also due slightly to regulated prices, which had deviated from the forecast back in October.
Despite the deviation from the forecast, the price developments observed in December are in line with the overall message of the current forecast. Inflation was forecasted to be very low in the last quarter of 2009. The CNB expects headline inflation to rise gradually during 2010 and slightly exceed the inflation target of 2% at the end of the year. Monetary-policy relevant inflation will be below headline inflation owing to growth in indirect taxes, and will gradually approach the CNB target from below.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the December 2009 inflation figures
Inflation comes in above CNB forecast at end of 2009
According to figures released today, the price level increased by 1.0% year on year in December 2009. Inflation thus rose further after recording a figure of 0.5% in November. Despite this increase, inflation was below the lower boundary of the tolerance band around the 3% target valid until the end of 2009. Compared to the new inflation target of 2% in effect since the beginning of 2010, inflation was at the lower boundary of the tolerance band.
Compared to the current CNB forecast, annual headline inflation in December 2009 was 0.5 percentage point higher. A large part of this deviation had occurred in the previous two months. The deviation of the December inflation figure from the forecast was due mainly to higher fuel prices as a result of rising oil prices, a smaller-than-expected decline in food prices and a smaller fall in the core component of inflation – adjusted inflation excluding fuels. The deviation was also due slightly to regulated prices, which had deviated from the forecast back in October.
Despite the deviation from the forecast, the price developments observed in December are in line with the overall message of the current forecast. Inflation was forecasted to be very low in the last quarter of 2009. The CNB expects headline inflation to rise gradually during 2010 and slightly exceed the inflation target of 2% at the end of the year. Monetary-policy relevant inflation will be below headline inflation owing to growth in indirect taxes, and will gradually approach the CNB target from below.
Tomáš Holub, Executive Director, Monetary and Statistics Department