Czech Republic: Inflation skyrockets to over 23-year high in February
Consumer prices rose 1.66% from the previous month in March, following February’s 1.28% increase. Looking at the details of the release, February’s increase mainly reflected rising prices for transport and housing, water, electricity, gas and other fuels.
Meanwhile, inflation surged to 12.7% in March from February’s 11.1, and thus marked the highest reading since May 1998 and moved further above the higher bound of the Central Bank’s 1.0%–3.0% tolerance range. Lastly, annual average inflation rose to 6.1% in March from 5.3% in February, marking the highest reading since December 2008.
Commenting on the inflation outlook, Jiri Polansky, analyst at Erste, stated:
“Current data suggest that average inflation could reach approx. 12% this year. The main reason will be rising food, energy and fuel prices, while the demand-side pro-inflationary impact will be significantly weaker than last year. However, this does not mean that core inflation will slow down. Rising costs will force companies or entrepreneurs to increase prices of goods and services, which are captured in core inflation. Inflation will remain elevated next year, but it will be gradually returning to the inflation target, which will be reached in 2024.”