The CNB comments on the March 2013 inflation figures
Inflation comes in below the CNB forecast in March
According to figures released today, the price level increased by 1.7% year on year in March 2013. Annual headline inflation was the same as in February. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, was also flat in March, at 0.9%. This means that it was just below the lower boundary of the tolerance band around the CNB’s target.
Annual headline inflation was 0.3 percentage point lower in March than the CNB’s current forecast. As in January and February, the downward deviation from the forecast was due to a lower-than-expected rise in administered prices resulting from lower growth in housing-related energy prices (gas, electricity and heat for households). In addition, administered price inflation continues to reflect the transfer of deregulated rents from administered prices to the category of adjusted inflation excluding fuels. The lower-than-expected inflation in March was also due to the fact that the gradual pass-through of this year’s increase in excise duty on cigarettes to cigarette prices, which had been forecasted to begin in February, has been negligible so far. Annual food price inflation in March was somewhat faster than forecasted. A less significant year-on-year decline in fuel prices than forecasted by the CNB also acted in the same direction. Adjusted inflation excluding fuels was broadly in line with the forecast in March.
The published figures signal a slight anti-inflationary risk to the CNB’s current forecast. According to this forecast, tax changes and gradually falling food, administered and import price growth are currently the sources of inflation. By contrast, the domestic economy is dampening inflation. According to the forecast, headline inflation will be close to the CNB’s 2% target this year despite significant impacts of tax changes, and will fall slightly below the target next year after these impacts fade away. Monetary-policy relevant inflation will be in the lower half of the tolerance band around the CNB’s target until the end of 2014.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the March 2013 inflation figures
Inflation comes in below the CNB forecast in March
According to figures released today, the price level increased by 1.7% year on year in March 2013. Annual headline inflation was the same as in February. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, was also flat in March, at 0.9%. This means that it was just below the lower boundary of the tolerance band around the CNB’s target.
Annual headline inflation was 0.3 percentage point lower in March than the CNB’s current forecast. As in January and February, the downward deviation from the forecast was due to a lower-than-expected rise in administered prices resulting from lower growth in housing-related energy prices (gas, electricity and heat for households). In addition, administered price inflation continues to reflect the transfer of deregulated rents from administered prices to the category of adjusted inflation excluding fuels. The lower-than-expected inflation in March was also due to the fact that the gradual pass-through of this year’s increase in excise duty on cigarettes to cigarette prices, which had been forecasted to begin in February, has been negligible so far. Annual food price inflation in March was somewhat faster than forecasted. A less significant year-on-year decline in fuel prices than forecasted by the CNB also acted in the same direction. Adjusted inflation excluding fuels was broadly in line with the forecast in March.
The published figures signal a slight anti-inflationary risk to the CNB’s current forecast. According to this forecast, tax changes and gradually falling food, administered and import price growth are currently the sources of inflation. By contrast, the domestic economy is dampening inflation. According to the forecast, headline inflation will be close to the CNB’s 2% target this year despite significant impacts of tax changes, and will fall slightly below the target next year after these impacts fade away. Monetary-policy relevant inflation will be in the lower half of the tolerance band around the CNB’s target until the end of 2014.
Tomáš Holub, Executive Director, Monetary and Statistics Department