Grocery store, discount – illustrative photo.
Prague – The pace of price growth in the Czech Republic decreased in February compared to January, mainly due to the fact that energy prices have already hit price ceilings. Food prices were mainly driven by food prices in February, according to analysts contacted by ČTK. According to their estimate, February year-on-year inflation was between 16.6 and 16.9 percent. In January, inflation was 17.5 percent. The Czech Statistical Office (ČSÚ) will publish data on February inflation on Friday.
“With the end of the cost-saving tariff, electricity prices rose sharply in January and came very close to the price ceiling. For February and the following months of this year, during which the price ceiling is active, there is not much room for further pro-inflationary impulse from the energy side,” said Raiffeisenbank analysts . They estimate annual inflation at 16.6 percent.
The chief economist of Cyrrus, Vít Hradil, has the same estimate. “The year-on-year rate of inflation will show a noticeable decrease in February. This will largely be the result of developments in the energy market, which have already largely risen in price up to the government's price ceilings, and therefore have no room for growth. In most other sections, too, we have the New Year's revaluation is already behind us, so there is no reason to expect dramatic developments. Food products will probably remain a problematic category, but even they will not repeat the enormous price increase from January,” he said. He also pointed out that the year-on-year comparison will already affect the start of the inflationary wave last February.
Analysts of Komerční banka (KB) expect February year-on-year inflation of 16.9 percent. “With the exception of food, year-on-year price growth should decrease for all main items of the consumer basket. Inflation should continue to subside in the coming months, but probably only at a gradual pace. This may foreshadow a surprisingly strong and broad-based increase in producer prices for January,” they said .
According to KB analysts, inflation will remain in double digits for most of the year and will exceed ten percent on average throughout the year. The Czech National Bank estimates inflation for this year at 10.8 percent, the Ministry of Finance at 10.4 percent.
In January, inflation reached 17.5 percent, accelerating from December's 15.8 percent. According to experts, the acceleration in the rate of price growth was mainly due to the increase in the price of energy after the end of the energy-saving tariff and the transition to price ceilings.