Czech inflation increased by 8.8% year-on-year, the Czech Statistical Office (CZSO) reported. This is easing down by 0.9 percentage points from June when the y-o-y increase dropped to single digits for the first time in a year and a half.

The summer price hike in the recreation and culture sector drove the 0.5% month-on-month increase in July. Despite the easing, Czech inflation is the ninth highest in Europe.

Pavla Sediva of CZSO singled out the impact of food prices on the weakened y-o-y growth. “They have been slowing down their y-o-y growth since December last year,” she commented, adding that growth of food prices was 9.5% and fell by 0.8% m-o-m.

Meat prices increased by 3.2% y-o-y, while milk, cheese and eggs by 8.3%, margarine and vegetable fats by 3.6%, fruit by 10.3%, and sugar by 44.7%.

Prices in the sector of housing, water, electricity, gas and other fuels had a significant influence on the overall price growth. Rental prices increased by 7.6%, water supply by 16.3%, sewage collection by 26.9%, electricity by 23.4%, and heat and hot water by 38.9%.

The Czech Press Agency (CTK) quoted an analysis by investment Platform Port, according to which Czech inflation remains the ninth highest inflation in Europe. Hungary has the highest inflation with 17.6%, followed by Serbia (13.7%) and Ukraine (11.3%). The lowest inflation is in Cyprus (1.47%), followed by Lichtenstein (1.6%) and Switzerland (1.6%).

Many local analysts expect the inflation to ease further in the coming months but warned that a fuel tax hike would negatively influence this development.

Head economist of UniCredit Bank Patrik Rozumbersky told CTK that there might not be further easing already in August. “Inflation will be boosted by the current price hike in fuels”, which besides higher taxes, is also driven by higher oil prices on world markets, Rozumbersky was quoted as saying by CTK.

Vit Endler, head of the crowdfunding platform Fingood, projected that the Czech central bank (CNB) is unlikely to change its interest rate policy given that “the CNB’s 2% inflation target remains unforeseeable”.

The CNB has consistently kept the interest rates at 7% since Governor Ales Michl took over last summer.