Czech Republic: Inflation rises to three-year high
December 9, 2011
In November, consumer prices rose 0.43% over the previous month, which was above the 0.26% increase recorded in October. The monthly jump reflected higher prices for food and non-alcoholic beverages, as well as prices for housing, water electricity and gas. As a result of the monthly jump, annual headline inflation climbed from 2.3% in October to 2.5% in November, which overshot both market expectations that had inflation remaining at 2.3% and the Central Bank's estimate, which had inflation falling to 2.0%. The October outturn marked the highest level since December of 2008 and, consequently, inflation hovered above the Central Bank's target of 2.0% ( 1.0 percentage points) for the second consecutive month. The Central bank revised its inflation forecast for this year to 2.0%, which is slightly below the previous estimate of 2.3%. For 2012, the Bank sees inflation rising to 2.8%, which is below its previous 3.2% estimate.
Author: Ricardo Aceves, Senior Economist