Czech inflation eases to 2.4% in Dec 2011, touch above forecasts.

By bne IntelliNews January 10, 2012
Consumer price inflation in the Czech Republic eased 2.4% y/y in December from an 11-month high of 2.5% y/y in the previous month, the statistics office said. Analysts polled by Reuters were expecting prices to advance by 2.3% y/y. Compared to the previous month, prices increased by 0.4% in December, the same as in November. The annual inflation was affected mainly by weaker growth in fuel and transportation prices. Another driver of inflation were higher prices in the housing, water, electricity, gas and other fuels. The monthly increase in prices was mainly due to more expensive food and non-alcoholic beverages. IntelliNews comment : The December inflation was well above the central banks target of 1.7% due to a faster growth in food prices. Analysts expect prices to continue rising at a quicker pace this year following the introduction of a higher rate of the lower VAT bracket. The higher-than-expected inflation, weaker crown and slowing economic growth all speak in favour of the central bank's alternative scenario and is a sign that the bank will most likely keep the rates unchanged in 2012.

Czech inflation eases to 2.4% in Dec 2011, touch above forecasts.

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