The CNB comments on the November 2012 inflation figures
Inflation comes in below the CNB forecast in November 2012
According to figures released today, the price level rose by 2.7% year on year in November 2012. Annual headline inflation thus slowed noticeably compared to October. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also fell significantly in November, to 1.5%. This means that it is in the lower half of the tolerance band set by the CNB.
Annual headline inflation was 0.3 percentage point lower in November than the CNB’s current forecast. The downward deviation from the forecast was due chiefly to lower-than-expected annual fuel price inflation. Acting in the same direction was also a slightly higher-than-forecasted annual decline in prices in the adjusted inflation excluding fuels segment, which still reflects above all subdued domestic demand. Annual growth in administered prices was slightly lower than expected by the CNB. By contrast, food prices grew slightly faster than forecasted by the CNB, which moderated somewhat the deviation from the forecast. The first-round effects of changes to indirect taxes were in line with the forecast.
The published data confirm the message of the CNB’s current forecast regarding the anti-inflationary effect of the domestic economy. This year’s inflation reflects tax changes, food price growth and gradually unwinding import price growth. The effect of an increase in food prices, observed at the end of 2011 when food prices partly reflected the increase in the VAT rate as of January 2012 in advance, started to unwind from annual food price inflation in line with the forecast. According to the forecast, headline inflation will stay slightly above the inflation target owing to an increase in both VAT rates of one percentage point. After this tax effect drops out in early 2014, it will fall slightly below the target. Monetary-policy relevant inflation will stay in the lower half of the tolerance band around the CNB’s target until the end of 2014, i.e. including at the monetary policy horizon.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the November 2012 inflation figures
Inflation comes in below the CNB forecast in November 2012
According to figures released today, the price level rose by 2.7% year on year in November 2012. Annual headline inflation thus slowed noticeably compared to October. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also fell significantly in November, to 1.5%. This means that it is in the lower half of the tolerance band set by the CNB.
Annual headline inflation was 0.3 percentage point lower in November than the CNB’s current forecast. The downward deviation from the forecast was due chiefly to lower-than-expected annual fuel price inflation. Acting in the same direction was also a slightly higher-than-forecasted annual decline in prices in the adjusted inflation excluding fuels segment, which still reflects above all subdued domestic demand. Annual growth in administered prices was slightly lower than expected by the CNB. By contrast, food prices grew slightly faster than forecasted by the CNB, which moderated somewhat the deviation from the forecast. The first-round effects of changes to indirect taxes were in line with the forecast.
The published data confirm the message of the CNB’s current forecast regarding the anti-inflationary effect of the domestic economy. This year’s inflation reflects tax changes, food price growth and gradually unwinding import price growth. The effect of an increase in food prices, observed at the end of 2011 when food prices partly reflected the increase in the VAT rate as of January 2012 in advance, started to unwind from annual food price inflation in line with the forecast. According to the forecast, headline inflation will stay slightly above the inflation target owing to an increase in both VAT rates of one percentage point. After this tax effect drops out in early 2014, it will fall slightly below the target. Monetary-policy relevant inflation will stay in the lower half of the tolerance band around the CNB’s target until the end of 2014, i.e. including at the monetary policy horizon.
Tomáš Holub, Executive Director, Monetary and Statistics Department