Czech inflation eases to five-year low of 0.1% in April defying expectations for faster growth

By bne IntelliNews May 12, 2014

Consumer price inflation in the Czech Republic eased to a five-year low of 0.1% y/y in April 2014 after staying at 0.2% in the previous three months mainly on the back of a slower growth in food and tobacco prices and falling housing and utility costs, data from the statistics office showed. The reading defied market expectations for a 0.3% annual rise in April.

In monthly terms, consumer prices did not change from March when they also stayed flat on the month.

Housing and utilities charges (27% of the basket) ticked higher by 0.1% on the month slightly softening the annual drop to 2.2% in April from 2.3% in March. The annual contraction was mainly due to a 10.5% decline in electricity and a 9.1% drop in natural gas charges.

Food and non-alcoholic beverage prices (17% of the basket) edged down by 0.9% m/m in April easing the annual growth of the component to 3.3% from 3.7% in the previous month. Transport prices rose 0.1% m/m helping soften the annual drop to 0.1% from 0.7%.

The April annual inflation was 0.1pp below than the central bank’s forecast for the month and below the lower band of its target range of 1%-3%. The indicator has been running below the central bank’s target for months forcing the bank to launch in November the first in more than a decade foreign currency interventions to weaken the koruna and stave off the threat of deflation. The weak but still positive growth in the first four months of 2014 confirm that the bank’s decision to use the exchange rate as an additional monetary policy instrument significantly contributed to averting the deflation threat. The bank’s forecast implies the currency lid to remain in place at least until early 2015. Yet, during the bank’s board monetary policy meeting on May 7, central bankers stated that the probability of a later exit from the exchange rate commitment was increasing.

  April-14 y/y  March-14 y/y  April-14 m/m 
Total 0.2 0.2 0.0
Food and non-alcoholic beverages 3.3 3.7 -0.9
Alcoholic beverages, tobacco 2.1 4.5 -1.1
Clothing and footwear 3.0 2.9 4.9
Housing, water, energy, fuel -2.2 -2.3 0.1
Furnishings, households equipment and maintenance -1.1 -1.3 -0.1
Health -2.4 -2.9 0.6
Transport -0.1 -0.7 0.1
Post and telecommunication -7.7 -9.1 0.0
Recreation and culture 0.7 0.5 0.0
Education 1.3 1.3 0.0
Restaurants and hotels 1.7 1.6 0.3
Miscellaneous goods and services 0.2 0.6 0.3
Source: Stats office      

Related Articles

UniCredit reportedly in talks to sell Czech/Slovak unit

UniCredit is in talks with two local suitors over the sale of the Italian bank’s Czech/Slovak business, local media reported on March 27. The claim remains only speculation, but if accurate, it ... more

Poland isolated again as it threatens to block EU declaration

Poland will not sign the Rome Declaration if its demands for moulding the EU’s future are not reflected in the document, Prime Minister Beata Szydlo threatened on March 23. The statement could ... more

EU asks CEE to comment on Russian gas promises

The European Commission has invited comments from Central & Eastern European states on proposals put forward by Russian gas giant Gazprom to meet competition concerns. Visegrad and the Baltic ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss