Czech Republic: Inflation remains steady in August
September 9, 2011
In August, consumer prices fell 0.26% over the previous month, which reversed the price increase of the same magnitude seen in July. The monthly drop was less severe than market expectations, which had consumer prices falling a more moderate 0.10%. According the National Statistics Office, the main driver behind the monthly drop was lower prices for food and non-alcoholic beverages. Annual headline inflation remained unchanged at July's 1.7% in August, undershooting both market expectations of a 1.9% rise as well as the Central Bank's estimate that had inflation rising to 2.1%. As a result, inflation remained below the Central Bank's target of 2.0% 1.0 percentage points for the third consecutive month. The Central Bank projects inflation to close at 2.3% by the end of this year, before rising to 3.2% at the end of 2012.
Author: Ricardo Aceves, Senior Economist