The CNB comments on the September 2014 inflation figures
Inflation comes in slightly above CNB forecast in September
According to figures released today, the price level increased by 0.7% year on year in September 2014. Consumer price inflation adjusted for the first-round effects of changes to indirect taxes reached 0.6% year on year in September. Inflation is thus still below the lower boundary of the tolerance band around the CNB’s target, although it is slowly approaching it.
As in July and August, annual headline inflation in September was 0.2 percentage point higher than forecasted by the CNB. As in the previous two months, the deviation from the forecast in September was due to higher annual food price inflation and, to a lesser extent, to a smaller fall in administered prices. By contrast, adjusted inflation excluding fuels and annual fuel price inflation were slightly below the forecast in September. The effects of changes to indirect taxes in September were in line with what the CNB had expected.
The published data continue to confirm the CNB’s opinion that the decision made in November to start using the exchange rate as an additional monetary policy instrument contributed significantly to averting the threat of deflation. The weakened exchange rate has so far been feeding through to inflation mainly via higher import prices, but it has also contributed to growth in the domestic economy. Its previous long-term anti-inflationary effect has thus faded quickly so far this year, thanks also to the easy monetary conditions, and the domestic economy is beginning to foster higher inflation. According to the current forecast, headline inflation will rise gradually further and return to the 2% target in 2015 H2. It will then stay close to the target in 2016.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the September 2014 inflation figures
Inflation comes in slightly above CNB forecast in September
According to figures released today, the price level increased by 0.7% year on year in September 2014. Consumer price inflation adjusted for the first-round effects of changes to indirect taxes reached 0.6% year on year in September. Inflation is thus still below the lower boundary of the tolerance band around the CNB’s target, although it is slowly approaching it.
As in July and August, annual headline inflation in September was 0.2 percentage point higher than forecasted by the CNB. As in the previous two months, the deviation from the forecast in September was due to higher annual food price inflation and, to a lesser extent, to a smaller fall in administered prices. By contrast, adjusted inflation excluding fuels and annual fuel price inflation were slightly below the forecast in September. The effects of changes to indirect taxes in September were in line with what the CNB had expected.
The published data continue to confirm the CNB’s opinion that the decision made in November to start using the exchange rate as an additional monetary policy instrument contributed significantly to averting the threat of deflation. The weakened exchange rate has so far been feeding through to inflation mainly via higher import prices, but it has also contributed to growth in the domestic economy. Its previous long-term anti-inflationary effect has thus faded quickly so far this year, thanks also to the easy monetary conditions, and the domestic economy is beginning to foster higher inflation. According to the current forecast, headline inflation will rise gradually further and return to the 2% target in 2015 H2. It will then stay close to the target in 2016.
Tomáš Holub, Executive Director, Monetary and Statistics Department