The CNB comments on the February 2012 inflation figures
Inflation comes in above CNB forecast in February 2012
According to figures released today, the price level increased by 3.7% year on year in February 2012. Annual headline inflation thus edged up further compared to January. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also rose slightly to 2.5% in December and is thus in the upper half of the tolerance band around the inflation target.
Annual headline inflation was 0.3 percentage point higher in February than the CNB’s current forecast. As in January, the upward deviation from the forecast in February was due to higher first-round effects of changes to taxes owing to a change made to the weights in the consumer basket in January and a higher increase in food prices when adjusted for tax effects. Annual growth in administered prices and fuel prices in February was also higher than expected. By contrast, adjusted inflation excluding fuels was slightly below the CNB’s forecast.
The published figures represent a weak inflationary risk to the CNB’s current forecast. Higher food prices suggest greater-than-forecasted impacts of the VAT change and possibly other cost factors on these prices. However, core inflation – i.e. adjusted inflation excluding fuels – remains slightly negative, confirming the message of the forecast with regard to the anti-inflationary effect of the domestic economy (in line with the data on subdued growth in GDP and wages in 2011 Q4 released today). The forecast assumes that headline inflation will be just above 3% for most of 2012 and will fall below the CNB target (i.e. below 2%) in 2013.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the February 2012 inflation figures
Inflation comes in above CNB forecast in February 2012
According to figures released today, the price level increased by 3.7% year on year in February 2012. Annual headline inflation thus edged up further compared to January. Monetary-policy relevant inflation, i.e. inflation adjusted for the first-round effects of changes to indirect taxes, also rose slightly to 2.5% in December and is thus in the upper half of the tolerance band around the inflation target.
Annual headline inflation was 0.3 percentage point higher in February than the CNB’s current forecast. As in January, the upward deviation from the forecast in February was due to higher first-round effects of changes to taxes owing to a change made to the weights in the consumer basket in January and a higher increase in food prices when adjusted for tax effects. Annual growth in administered prices and fuel prices in February was also higher than expected. By contrast, adjusted inflation excluding fuels was slightly below the CNB’s forecast.
The published figures represent a weak inflationary risk to the CNB’s current forecast. Higher food prices suggest greater-than-forecasted impacts of the VAT change and possibly other cost factors on these prices. However, core inflation – i.e. adjusted inflation excluding fuels – remains slightly negative, confirming the message of the forecast with regard to the anti-inflationary effect of the domestic economy (in line with the data on subdued growth in GDP and wages in 2011 Q4 released today). The forecast assumes that headline inflation will be just above 3% for most of 2012 and will fall below the CNB target (i.e. below 2%) in 2013.
Tomáš Holub, Executive Director, Monetary and Statistics Department