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

Central European banks eye south-eastern expansion

Banking merger and acquisition (M&A) activity in Central Europe is likely to be further limited by the upturn in the region’s economies, industry sources said in comments published on May 29. ... more

Hungarian PM's "proxy" moves into the nuclear industry as Paks tenders approach

Firms controlled by Hungarian oligarch Lorinc Meszaros have purchased a 51% stake in the Hungarian subsidiary of Czech nuclear ... more

Czech PM accepts new nominee for finance minister

Reducing the political tension in the country a little, Czech Prime Minister Bohuslav Sobotka accepted on May 17 the nomination of a new finance minister from coalition partner Ano. Meanwhile, ... 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

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:

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