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).
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. Compared to December, prices increased by six percent, the Czech Statistical Office (ČSÚ) said today. According to the Czech National Bank (ČNB) and analysts, the acceleration of inflation was mainly caused by the increase in energy prices after the end of the savings tariff and the transition to price ceilings. Analysts expect inflation to decrease from February, partly due to weakening domestic demand.
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In January mainly regulated prices increased. Year-on-year prices for electricity rose 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, the CZSO reported. Compared to last January, the price of food and non-alcoholic beverages rose by almost a quarter. The prices of goods rose by 20.8 percent year-on-year in January, and the prices of services by 12.2 percent.
January inflation was in line with the CNB forecast. At the same time, regulated prices grew more slowly than the central bank had anticipated, while food and tobacco prices rose faster.
The CNB forecast assumes that the acceleration of inflation in January is temporary and is mainly related to the growth of regulated prices. “Inflation will subsequently begin to decline rapidly and will decrease to single-digit values in the second half of this year. The market components of inflation will ease due to decreasing cost pressures from abroad and from the domestic economy. At the same time, there will be a gradual correction of the currently culminating profit margins of domestic manufacturers, traders and service providers, ” said Luboš Komárek, deputy director of the monetary section of the CNB.
Analysts also expect a slowdown in inflation in the coming months. “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 slowing inflation.
Czech inflation in January was also among the highest in Europe. Of the countries of the European Union, prices grew faster only in the Baltics and in Hungary, the analysis of the Portu investment company showed. While in the Czech Republic the rate of price growth increased by 1.7 percentage points to 17.5 percent compared to December, in the eurozone inflation decreased by 0.7 percentage points to 8.5 percent.
