Czech Republic: Inflation rises in June
July 11, 2012
In June, consumer prices added 0.2% over the previous month, which followed an increase of the same magnitude in May and came in above market expectations of a flat reading. The monthly increase reflected higher prices for food and non-alcoholic beverages as well as for alcoholic beverages and tobacco. As a result of the monthly rise, annual headline inflation rose from 3.2% in May to 3.5% in June, which overshot market expectations of a 3.3% increase, but fell short of the Central Bank's estimate which had inflation rising to 3.6%. Nevertheless, at the current level inflation remains above the Central Bank's target of 2.0% (with a tolerance margin of plus/minus 1.0 percentage points). The Czech National Bank revised its inflation forecasts and now expects it to rise to fall to 3.0% by the end of this year, which is down from its previous 3.5% estimate. For 2013, the Bank predicts inflation to fall further to 2.3%.