Illustration photo – Czech Statistical Office. Illustrative image.
Prague – Producer prices in the Czech Republic continued to rise by tens of percent year-on-year in January this year. In agriculture they rose by 25.5 percent, in industry by 19 percent and in construction by 11.4 percent. The prices of market services for businesses also increased year-on-year, by 6.3 percent. This follows from the data published today by the Czech Statistical Office (ČSÚ). However, year-on-year price growth slowed in all mentioned groups compared to December.
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In agriculture, compared to last January, the prices of potatoes and eggs, for example, rose significantly. Potatoes went up in price by 43.1 percent, and eggs even by 82.7 percent. Overall, prices in crop production rose by 17.7 percent. In addition to potatoes, the price of vegetables also increased by 39.1 percent and cereals by 27.5 percent. Conversely, fruit prices fell by 7.4 percent and oilseeds also became cheaper by 2.2 percent. In livestock production, prices rose by 37.8 percent, which according to the CZSO is the highest year-on-year growth so far. In addition to eggs, pig prices also rose by 51 percent, poultry prices by 29.1 percent, milk prices by 36.4 percent and cattle prices by 19.7 percent.
In industry, for example, the prices of electricity, gas, steam and air conditioning rose by 35.7 percent, and the prices of black and brown coal and lignite by 82 percent. According to Vladimír Klimeš, the head of the CZSO Industry and Foreign Trade Statistics Department, it is energy prices that have contributed the most to rising prices in industry. Industrial producer prices excluding energy increased by 13.3 percent year-on-year. In addition to electricity and coal, the price of water also increased by 16.3 percent, food products by 29.1 percent and motor vehicles by 6.2 percent.
In the construction industry, the prices of consumed materials and products rose by 14.3 percent year-on-year in January. In services, prices related to employment increased by 27.6 percent, in programming by 9.1 percent, in storage and transportation support services by 5.5 percent, and in advertising services and market research by 6.4 percent.
“The January results of prices in production do not sound favorable, as they confirm the continuation of the inflationary wave in a large part of the economy. We may be pleased with the lower year-on-year figures, but they go against the calculation from a higher comparative basis,” said Creditas Bank chief economist Petr Dufek.
“The question is whether a new pro-inflationary impulse is being created in the economy – or whether the economy is still adapting to the previous shock. Data on the development of demand and data on the expectation of the development of production prices point to the second possibility,” Raiffeisenbank analyst David Vagenknecht evaluated the current data. “The decline in demand should catch up with prices sooner or later. However, the risk is that demand will recover faster than currently calculated,” he added.
According to Trinity Bank Chief Economist Lukáš Kovanda, the rise in production prices portends an increase in consumer prices. “This is another pressure on the CNB to raise interest rates, because none of the experts expected such a massive increase in production prices,” he said. However, he does not expect the central bank to raise interest rates.
In January, statisticians mostly also recorded a month-on-month increase in prices. For agricultural producers, prices rose by 1.7 percent, for industrial producers by 5.8 percent, and construction work prices rose by 0.6 percent. Only the prices of market services for businesses decreased slightly month-on-month, falling by 0.3 percent.
