Czech consumer prices rose by 2.1% year-on-year and by 0.1% month-on-month, the Czech Statistical Office (CZSO), confirming its flash estimate released earlier this month.

This is down on the 2.5% y/y acceleration registered in April and comes amid declining prices of food and soft drinks.

“This growth was, as in April, moderated by food prices. These, partly due to last year's higher benchmark, deepened their y/y decline and were cheaper by approximately 2%, in comparison with May the previous year,” commented Pavla Šedivá of CZSO.

In the food prices basket, the prices of cheese dropped by 2.6% y/y and prices of oils and fats by 16.4%, while prices of non-alcoholic beverages dropped by 1.7%. Prices of butter were down by 23.3% and of potatoes by 19.9%.

The prices in the transportation basket had the greatest impact on the overall growth, where prices of fuels and lubricants for personal transport equipment rose by 26.3%, followed by prices in the housing, water, electricity, gas and other fuels basket. Prices of goods were up by 0.6% and of services by 4.7%.

Analysts surveyed by the Czech Press Agency (CTK) praised that high fuel prices have not pushed up food prices, but warned that the Middle East conflict is yet to affect other baskets.

“The longer the current conflict in the Middle East will last the more likely it is that price growth of goods, particularly as a result of higher import prices, pricier input and more demanding logistics, will accelerate,” Miroslav Novák, head analyst of Citfin consultancy, was quoted as saying by CTK. He expects inflation around 3% towards the end of the year.

CTK highlighted that Czechia registered a lower inflation level in May than its neighbours, which includes German 2.6% inflation, Poland with 3.1%, Austria with 3.7% and Slovakia with 3.9% inflation.

The country also registered the lowest inflation among the 41 European countries monitored by the Port investment platform, CTK noted.