The CNB comments on the March 2012 inflation figures
Inflation comes in noticeably above CNB forecast in March 2012
According to figures released today, the price level increased by 3.8% year on year in March 2012. Annual headline inflation thus increased further slightly compared to February. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also rose slightly in March, to 2.7%, and is thus in the upper half of the tolerance band around the inflation target.
Annual headline inflation was 0.5 percentage point higher in March than the CNB’s current forecast. As in the previous two months, the upward deviation from the forecast in March was chiefly due to higher growth in food prices, which picked up significantly owing to an extraordinary (and probably largely temporary) rise in egg prices. The higher-than-expected inflation in March was also fostered by larger first-round effects of the January VAT increase due to a change made to the weights in the consumer basket and higher annual growth in administered prices and fuel prices. By contrast, adjusted inflation excluding fuels was below the CNB’s forecast in March.
The published figures represent a short-term inflationary risk to the CNB’s current forecast associated mainly with food prices. Since the start of the year, these prices have been affected by VAT changes to a greater extent than the CNB had expected, and other cost factors have been affecting them in the same direction. However, core inflation, i.e. adjusted inflation excluding fuels, remains slightly negative, confirming the message of the forecast regarding the anti-inflationary effect of the domestic economy. The forecast expects headline inflation to be just above 3% for most of 2012 and to fall below the CNB target (i.e. below 2%) in 2013.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the March 2012 inflation figures
Inflation comes in noticeably above CNB forecast in March 2012
According to figures released today, the price level increased by 3.8% year on year in March 2012. Annual headline inflation thus increased further slightly compared to February. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also rose slightly in March, to 2.7%, and is thus in the upper half of the tolerance band around the inflation target.
Annual headline inflation was 0.5 percentage point higher in March than the CNB’s current forecast. As in the previous two months, the upward deviation from the forecast in March was chiefly due to higher growth in food prices, which picked up significantly owing to an extraordinary (and probably largely temporary) rise in egg prices. The higher-than-expected inflation in March was also fostered by larger first-round effects of the January VAT increase due to a change made to the weights in the consumer basket and higher annual growth in administered prices and fuel prices. By contrast, adjusted inflation excluding fuels was below the CNB’s forecast in March.
The published figures represent a short-term inflationary risk to the CNB’s current forecast associated mainly with food prices. Since the start of the year, these prices have been affected by VAT changes to a greater extent than the CNB had expected, and other cost factors have been affecting them in the same direction. However, core inflation, i.e. adjusted inflation excluding fuels, remains slightly negative, confirming the message of the forecast regarding the anti-inflationary effect of the domestic economy. The forecast expects headline inflation to be just above 3% for most of 2012 and to fall below the CNB target (i.e. below 2%) in 2013.
Tomáš Holub, Executive Director, Monetary and Statistics Department