The CNB comments on the June 2012 inflation figures
Inflation comes in slightly below the CNB forecast in June 2012
According to figures released today, the price level increased by 3.5% year on year in June 2012. Annual headline inflation thus rose slightly compared to May. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, increased to 2.2% in June and is thus in the upper half of the tolerance band around the inflation target.
Annual headline inflation was 0.1 percentage point lower in June than the CNB’s current forecast. The downward deviation from the forecast was chiefly due to lower-than-expected annual growth in administered prices and fuel prices. Adjusted inflation excluding fuels was also somewhat below the CNB forecast in June and was still slightly negative. By contrast, food prices increased significantly more in year-on-year terms than expected by the CNB. This more than offset the lower-than-forecasted annual food price inflation observed in April and May.
The published data confirm the message of the CNB’s current forecast regarding the anti-inflationary effect of the domestic economy. This year’s rise in inflation has been due to several concurrent one-off factors, in particular the VAT change, growth in food prices and administered prices and the gradual pass-through of the earlier exchange rate depreciation to consumer prices. According to the forecast, headline inflation will be close to the current elevated levels in the rest of 2012 as a result of the VAT increase. Monetary-policy relevant inflation will be significantly lower than headline inflation throughout 2012 owing to the aforementioned tax change. Both headline and monetary-policy relevant inflation will fall slightly below the target next year according to the baseline scenario of the forecast.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the June 2012 inflation figures
Inflation comes in slightly below the CNB forecast in June 2012
According to figures released today, the price level increased by 3.5% year on year in June 2012. Annual headline inflation thus rose slightly compared to May. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, increased to 2.2% in June and is thus in the upper half of the tolerance band around the inflation target.
Annual headline inflation was 0.1 percentage point lower in June than the CNB’s current forecast. The downward deviation from the forecast was chiefly due to lower-than-expected annual growth in administered prices and fuel prices. Adjusted inflation excluding fuels was also somewhat below the CNB forecast in June and was still slightly negative. By contrast, food prices increased significantly more in year-on-year terms than expected by the CNB. This more than offset the lower-than-forecasted annual food price inflation observed in April and May.
The published data confirm the message of the CNB’s current forecast regarding the anti-inflationary effect of the domestic economy. This year’s rise in inflation has been due to several concurrent one-off factors, in particular the VAT change, growth in food prices and administered prices and the gradual pass-through of the earlier exchange rate depreciation to consumer prices. According to the forecast, headline inflation will be close to the current elevated levels in the rest of 2012 as a result of the VAT increase. Monetary-policy relevant inflation will be significantly lower than headline inflation throughout 2012 owing to the aforementioned tax change. Both headline and monetary-policy relevant inflation will fall slightly below the target next year according to the baseline scenario of the forecast.
Tomáš Holub, Executive Director, Monetary and Statistics Department