Czech annual inflation eases sharply to four-year low of 0.2% in Jan 2014.

By bne IntelliNews February 12, 2014

The Czech annual inflation slowed sharply to more than a four-year low of 0.2% in January 2014 from 1.4% in the month before mainly due to a drop in housing costs and utility prices, data from the statistics office showed. The reading is in line with market expectations and the lowest since October 2009.

In monthly terms, consumer prices edged up by 0.1% in January, following a 0.4% hike in December. This was the weakest rise for January since 1993, the statistics office said.

Housing and utilities charges (27% of the basket) declined by 1.5% on the month pushing the annual figure into a 2.4% drop in January, versus a 1.2% rise in December.

Food and non-alcoholic beverage prices (17% of the basket) grew by 1.8% m/m easing the annual growth of the component to 3.9% from 4.8%. Transport prices edged up 0.4% m/m in January leading to an annual expansion of 1%, slightly slower than December’s 1.1%. The annual growth in alcohol and tobacco prices, on the other hand, accelerated to 3.8% in January from 3.5% the month before.

The January annual inflation was by 0.2pp below than the central bank’s forecast for the month and below the lower band of its target range of 1%-3%. The indicator had been running below the target up to November 2013 when the bank was forced to step into the currency market to weaken the koruna and ward off deflation threat.

  Jan-14 y/y change Dec-13 y/y change Jan-14 m/m change
Total 0.2 1.4 0.1
Food and non-alcoholic beverages 3.9 4.8 1.8
Alcoholic beverages, tobacco 3.8 3.5 1.6
Clothing and footwear 2.0 1.6 -3.4
Housing, water, energy, fuel -2.4 1.2 -1.5
Furnishings, households equipment and maintenance -1.4 -1.9 0.3
Health -3.8 0.4 -3.5
Transport 1.0 1.1 0.4
Post and telecommunication -9.8 -9.0 0.0
Recreation and culture 0.5 0.9 0.8
Education 1.1 1.1 0.0
Restaurants and hotels 1.5 1.8 0.3
Miscellaneous goods and services 0.9 1.1 0.9
Source: Stats office      
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