Czech consumer prices increased by 2.2% year-on-year in August, which is the same level of growth Czech statisticians reported for July. Month-on-month, inflation grew by 0.3%.   

The y/y figure is slightly above the 2% inflation target level and the 1.8% y/y forecast for August by the Czech National Bank (CNB). It also comes two weeks ahead of the CNB monetary meeting where it will decide on whether to keep lowering interest rates, a cycle which it began last December.  

“The y/y development of consumer prices in August was significantly influenced by the prices of food and fuels, whose two-way movements, however, offset each other,” commented Paval Sediva of the Czech Statistical Office (CZSO).

Sediva added that prices of fuels “were lower by approximately 4% in comparison with last August” and “on average, Petrol Natural 95 was sold at gas stations for CZK37.65 [€1.5] per litre, which was the lowest price since this January.”

Prices in transport, including fuel prices and lubricants for personal transport equipment, turned from a 5.6% growth in July to a 4.1% decline in August. In the food and non-alcoholic beverages sector, most items slowed down the price decline, including flour (-10.6% in August compared to -15.4 % in July), smoked meat and sausages (-2.8% compared to -4.2%), and vegetables (-2% compared to -4.8%). Prices of butter accelerated their growth to 22.4%, chocolate to 18.6% and non-alcoholic beverages to 4.2%.  

The most significant impact on y/y growth came from the prices of housing, water, electricity, gas and other fuels, with prices of actual rentals up by 6.6%, materials and services for maintenance and repair of dwellings by 4.7%, water supply by 10.9%, sewage collection by 13.4%, electricity by 8.2% and heat and hot water by 5.8%. Prices of natural gas fell by 7.2% and those of solid fuels by 2.5%.

In m/m terms, the sector of alcoholic beverages and tobacco registered a price increase of 1.3% for tobacco, 1.7% for spirits, and 1.8% for wine. In food and non-alcoholic beverages, prices of smoked meat and sausages were up by 2.1%, fruit by 2.2%, semi-skimmed milk by 8.8%, oils and fats by 3.1%, non-alcoholic beverages by 1%, chocolate by 4.7%, butter by 4.8% and pork by 1%. In the housing, water, electricity, gas and other fuels, prices of actual rental increased by 0.3% and heat and hot water by 0.7%. Prices of fuel and transport lubricants fell by 2.2% and prices of motor cars by 0.7%.