Czech Republic: Inflation moderates in August
September 9, 2013
Consumer prices fell 0.2% in August over the previous month, which follows a decrease of the same amount in July. According to the statistical office, the decrease in August mainly reflects lower prices for food and non-alcoholic beverages.
As a result of the monthly decrease in August, annual headline inflation edged down from 1.4% in July to 1.3%, falling short of market expectations that saw inflation stable at 1.4%. Inflation continues to sit below the Czech National Bank's target of 2.0% with a tolerance margin of plus or minus 1.0%.
The Czech National Bank expects annual consumer prices to end this year at 1.6%, before inching up to 1.8% at the end of 2014. FocusEconomics Consensus Forecast panellists broadly share the Bank's assessment and expect inflation to reach 1.7% by the end of this year, which is unchanged from last month's Consensus. For 2014, panellists expect inflation to remain stable at 1.7%.
Author: Ricardo Aceves, Senior Economist