Consumer prices in the Czech Republic rose by 17.5 percent year-on-year in January. The pace of inflation accelerated, in December prices were 15.8 percent higher year-on-year. Due to the end of the savings tariff for households, energy prices in particular had an impact, heat, water and sewage, and food also became more expensive. Compared to December, prices for consumers were six percent higher in January. This follows from the data published today on the website by the Czech Statistical Office (ČSÚ).
Prague – Consumer prices in the Czech Republic rose by 17.5 percent year-on-year in January. The pace of inflation accelerated, in December prices were 15.8 percent higher year-on-year. Due to the end of the savings tariff for households, energy prices in particular had an impact, heat, water and sewage, and food also became more expensive. Compared to December, prices for consumers were six percent higher in January. This follows from the data published on the website by the Czech Statistical Office (ČSÚ). Analysts expect inflation to decrease from February.
“Year-on-year electricity prices increased by 36.4 percent, natural gas by 87 percent, water by 16.3 percent, sewage by 30.3 percent, and heat and hot water by 44.7 percent,” said the head of the statistics department consumer prices of CZSO Pavla Šedivá. The prices of goods rose by 20.8 percent year-on-year in January, and by 12.2 percent for services.
According to the estimates of analysts and the Czech National Bank (ČNB), inflation peaked in January and will decline in the following months. In the second half of the year, it should fall below ten percent. Annual inflation this year, according to estimates by the CNB and the Czech Banking Association (ČBA), will reach 10.8 percent, the Ministry of Finance estimates it at 10.4 percent. Last year, according to the CZSO, the average rate of inflation was 15.1 percent.
In a year-on-year comparison, electricity prices went from a decrease in December to an increase in January, while the growth in the price of water, sewage, heat and hot water accelerated. On the contrary, the increase in the price of natural gas moderated against December. In January, rent prices rose by more than six percent year-on-year, products and services for routine apartment maintenance by 18.6 percent, and solid fuels by more than 58 percent.
Compared to last January, the price of food and non-alcoholic beverages rose by almost a quarter. The prices of eggs increased by 85 percent, sugar by 84.7 percent, flour by 44.2 percent, semi-skimmed milk by 39.5 percent, pork by 36.8 percent, and poultry by 32.4 percent. Clothing and footwear went up in price by 16.3 percent. People paid 23.8 percent more year-on-year for catering services, and almost a fifth more for accommodation. Vacations with comprehensive services became more expensive by more than 19 percent.
In a month-on-month comparison, the prices of goods increased by 8.7 percent and services by 1.9 percent. “The significant increase in prices in the housing section was largely influenced by the end of the cost-saving tariff, when the price of electricity rose by 139.8 percent compared to December,” said the CZSO. Compared to December, heat and hot water rose in price by 23.5 percent, sewage by 30.3 percent, water by 16.3 percent and natural gas by 2.2 percent.
Prices of food and non-alcoholic beverages in January month-on-month increased by 3.9 percent. Non-alcoholic beverages, fruit, vegetables, eggs and pork were the most expensive. Butter and semi-fat long-life milk became cheaper. The prices of spirits, beer and wine rose by around nine percent compared to December. Fuel and car prices went down slightly.
Survey: Seven out of ten Czechs are worried that they will be worse off with their money this year than last year
Seven out of ten Czechs are worried that they will be worse off with their money this year than last year. For 47 percent, the main reason for concern is high inflation, for 31 percent, the rise in energy prices. This follows from the results of a survey by the Ipsos agency for the company Generali Investments CEE, which is available to ČTK. The Czech Statistical Office reported today that year-on-year inflation reached 17.5 percent in January, while consumer prices rose by six percent compared to December.
The survey showed that for the majority of Czechs, last year was also difficult from a financial point of view, 60.7 percent of the respondents said that they were able to cope with high inflation and rising energy prices only with difficulty. Pessimism prevails for this year, when 69.2 percent of people fear that their financial situation will be worse than last year.
The biggest concern is the further growth of inflation, which last year reached 15.1 percent for the whole year and this year, according to the estimate of the Czech National Bank and the Ministry of Finance, will exceed ten percent. Concerns about overall inflation are higher than just the rise in energy prices, which was the main source of concern in the second half of last year.
“As we have already noticed, the situation surrounding energy prices is starting to calm down. The falling price of gas on world markets, together with the set government price ceiling, is leading to a decrease in public concerns. However, as the results of the survey show, Czechs are increasingly afraid of the overall development of inflation. A record 84.7 percent of them are currently feeling its effects,” said Generali Investments CEE Chief Economist Radomír Jáč.
The survey shows that due to rising prices, 70.5 percent of Czechs are trying to reduce energy consumption and water and two-thirds save on food purchases. Almost half of people limit their visits to restaurants, a third spend less on their hobbies and cut back on big expenses. A fifth of people limit their car journeys and cancel subscriptions to magazines or streaming services.
The survey was conducted at the turn of January and February on a representative sample of 1,050 people aged 18 to 65.
Analysts: Energy prices contributed to higher inflation, price growth will slow down from February< /h3>
The January acceleration of inflation to 17.5 percent from December's 15.8 percent was mainly caused by energy prices rising to price ceilings after the end of the savings tariff. Analysts interviewed by ČTK agree on this. They assume that inflation will decrease from February. A higher comparative base than last year, but also weakening domestic demand, will contribute to this.
“The sharp increase in prices was caused by the end of the savings tariff and the revaluation at the beginning of the year. Some traders obviously chose the strategy of selling less at higher margins. This confirms that inflationary pressures in our economy are still very strong,” said BH's chief economist Securities Štěpán Křeček. According to him, the strong exchange rate of the Czech crown prevented even higher inflation.
In the coming months, however, analysts expect a slowdown in the rate of price growth. “From February, the inflationary trend should break and price growth should gradually weaken. Last year's high base and the overall slowdown in demand in the economy will play a fundamental role in the expected drop in inflation,” UniCredit Bank economist Patrik Rožumberský said. According to him, the strong koruna, which makes imports cheaper, and the favorable development of prices on the electricity and gas markets could also contribute to the slowdown in inflation.
The chief economist of Banka Creditas mentions the strong koruna and the weakening of demand as reasons for the slowdown in inflation. Petr Dufek. According to him, the discounting of international maritime transport will also have an anti-inflationary effect. “However, it will take a long time to return to the target of two percent (inflation),” Dufek pointed out.
Akcenta analyst Miroslav Novák also points out that the highly inflationary environment in the economy still persists. “For the years 2009 to 2021, the price level increased by a total of 27.9 percent. If we assume a 10.8 percent increase in the price level for this year according to the CNB forecast and add last year's 15.1 percent, then we have de facto identical growth in two years, or growth by 27.5 percent,” he said.