Czech consumer prices  increased by 9.7% year-on-year and by 0.3% month-on-month in June, the country’s statistical office (CZSO) reported on Thursday, July 13.

The y-o-y growth eased by 1.4 percentage points from its May development, and it is the first time inflation was below double-digit figures since January 2022.

CZSO’s Vice President Jaroslav Sixta summed up that the “slowing down of price growth was influenced mainly by the development in the food and non-alcoholic sector and the housing sector”.

Inflation growth moderated “already for the fifth time,” Sixta also commented, adding that “lower price growth had been recorded for the last time in December 2021” when it was 6.6% y-o-y.

Czech Prime Minister Petr Fiala, who joined Sixta at a press conference, stated that government steps, including energy price caps or austerity measures, contributed to lower the inflation below 10%.

“We have been pushing produces, suppliers of food, fuel and other commodities, so citizens do not pay for these more than in surrounding countries,” Fiala told local journalists.

Many local market analysts expected inflation to drop below the double-digit threshold in May already, when the price growth figures came as a disappointment, prompting warnings about the future economic outlook and projecting that the target price growth of the Czech National Bank (CNB) of 2% may be far from being achieved anytime soon.

Former minister of finance from the opposition ANO party Alena Schillerova and former governor of the CNB Jiri Rusnok commented for  Czech Television that more optimistic figures reflect the "high comparative base last year, which was 17.2%".

"It is not a reason for celebrations. We are still almost five times above the CNB's inflation target," Rusnok stated.   

Statisticians pointed out that “mainly prices of meat moderated their [y-o-y] growth to 4.7%” compared to an increase of 8.7% in May, and “prices of cheese and curd to 10%” compared to an increase of 16.1% in May. Prices of oils and fats decreased by 4.3% in June.

The June y-o-y growth was most influenced by the sector housing, water, electricity, gas and other fuels. Rent prices increased by 6.9%, water supply by 16.3%, sewage collection by 26.9%, electricity by 24.6%, and heat and hot water by 40.7%.   

Prices in the monitored recreation and culture sector drove the m-o-m increase in prices, with seasonal prices of package holidays increasing by 8.7%. In the housing sector, prices of electricity rose by 0.5%.

M-o-m growth was also registered in alcoholic beverages and tobacco, with prices of wine increasing by 2.6% and beer by 1.5%.