The CNB comments on the February 2010 inflation figures
Inflation comes in below the CNB forecast in February
According to figures released today, the price level increased by 0.6% year on year in February 2010. Compared to January, inflation thus declined slightly further and moved below the lower boundary of the tolerance band set around the CNB’s new 2% target valid since the beginning of 2010. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, was -0.4% in February.
Annual headline inflation was 0,3 percentage point lower than the current CNB forecast in February 2010. Part of this deviation was due to the developments in January. The February deviation from the forecast was due mainly to lower adjusted inflation excluding fuels. By contrast, fuel and food prices were higher than expected. The prediction of regulated prices and the effects of changes to indirect taxes roughly materialised.
Despite the deviation from the forecast, the price developments observed so far in the first quarter are broadly in line with the message of the current forecast. According to this forecast, headline inflation should rise in the course of 2010 and, due to the effect of the tax changes, get slightly above the CNB’s target of 2% in the second half of the year. At the monetary policy horizon, i.e. in 2011 H1, headline inflation will be close to the inflation target. Monetary-policy relevant inflation will be below headline inflation from the start of this year (owing to indirect tax changes). It will then approach the CNB’s target from below over the monetary policy horizon.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the February 2010 inflation figures
Inflation comes in below the CNB forecast in February
According to figures released today, the price level increased by 0.6% year on year in February 2010. Compared to January, inflation thus declined slightly further and moved below the lower boundary of the tolerance band set around the CNB’s new 2% target valid since the beginning of 2010. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, was -0.4% in February.
Annual headline inflation was 0,3 percentage point lower than the current CNB forecast in February 2010. Part of this deviation was due to the developments in January. The February deviation from the forecast was due mainly to lower adjusted inflation excluding fuels. By contrast, fuel and food prices were higher than expected. The prediction of regulated prices and the effects of changes to indirect taxes roughly materialised.
Despite the deviation from the forecast, the price developments observed so far in the first quarter are broadly in line with the message of the current forecast. According to this forecast, headline inflation should rise in the course of 2010 and, due to the effect of the tax changes, get slightly above the CNB’s target of 2% in the second half of the year. At the monetary policy horizon, i.e. in 2011 H1, headline inflation will be close to the inflation target. Monetary-policy relevant inflation will be below headline inflation from the start of this year (owing to indirect tax changes). It will then approach the CNB’s target from below over the monetary policy horizon.
Tomáš Holub, Executive Director, Monetary and Statistics Department