Czech Republic: Inflation rises in June
July 9, 2013
In June, consumer prices rose 0.4% over the previous month, which contrasts the 0.2% drop registered in May and exceeded market expectations a 0.1% rise. According to the statistical office, the monthly jump reflects higher prices for food and non-alcoholic beverages. As a result of the monthly increase, annual headline inflation rose to 1.6% in June from 1.3%, which had market the lowest level since June 2010. In addition, the annual increase overshot market expectations, which had inflation remaining stable at 1.3%. Inflation continues to sit within the Central Bank's target of 2.0% with a tolerance margin of plus/minus 1.0 percentage points. The Czech National Bank expects annual consumer prices to end the year at 1.8%, before picking up to 2.0% by the end of 2014. FocusEconomics Consensus Forecast panellists share the Bank's assessment and also expect inflation to reach 2.3% by the end of this year, which is down 0.1 percentage points from last month's Consensus. For 2014, panellists expect inflation to fall to 1.8%.
Author: Ricardo Aceves, Senior Economist