Czech Republic: Inflation rises to five-month high
June 9, 2011
In May, consumer prices jumped 0.51% over the previous month, which nearly doubled the 0.26% increase observed in April. The price increase reflected higher prices for food and non-alcoholic beverages as well as automotive fuels. As result of the monthly spike, annual headline jumped from 1.6% in April to 2.0% in May, which represented the highest level since December 2010. The annual reading overshot market expectations of a 1.8% rise, as well as the Czech National Bank's estimate that inflation would inch up to 1.7%. At the current level, inflation matched the Central Bank's target rate of 2.0% 1.0 percentage points. The Central Bank expects inflation to rise to 2.3% in the final quarter of this year before inching down to 2.2% in the fourth quarter of 2012.
Author: Ricardo Aceves, Senior Economist