Czech Republic: Inflation moderates in April
May 10, 2011
In April, consumer prices rose 0.26% over the previous month, which was well above the 0.09% price increase observed in March. The monthly spike reflected higher prices for clothing and footwear, as well as for transport, amid higher fuel costs. Despite the pronounced price increase, annual headline inflation inched down from 1.7% in March to 1.6% in April, which represented the lowest level since June 2010. The reading was in line with market expectations, but below the Czech National Bank's estimate that inflation would remain unchanged at 1.7%. At the current level, inflation remains below the Central Bank's target 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