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Czech August Inflation Rate Remains at 1.9%, Highest Since March 2009
The Czech Republic’s inflation rate was unchanged at the highest level in 17 months in August as food, tobacco and housing prices held their annual increases. The rate was below the central bank’s forecast.
The annual rate was 1.9 percent, the same as in July, which was the highest since March 2009, the statistics office in Prague said on its website today. The median estimate of 14 economists surveyed by Bloomberg was for prices to advance 2 percent. Prices fell 0.3 percent on the month. The central bank forecast annual inflation of 2 percent for August.
The “minor deviation” from the central bank forecast was caused by slower growth in state-regulated prices, which include energy costs, and in food prices, the bank said in a statement on its website. “The August data suggest that the forecast for the third quarter is largely materializing,” it said.
Price growth has accelerated this year as improving demand for Czech exports, such as Skoda Auto AS cars, helps the economy recover from the worst recession since the end of communism two decades ago. Czech gross domestic product rose an annual 2.4 percent in April-June period, the fastest in two years, and showed accelerating household demand.
Price growth is also driven by an increase in the excise tax on tobacco product from the beginning of 2010.
The central bank left the benchmark two-week repurchase rate at a record-low 0.75 percent on Aug. 5, and signaled borrowing costs may be stable until the middle of next year. The new central bank forecast sees inflation below its 2 percent target in the third and fourth quarters of next year.
To contact the reporter on this story: Peter Laca in Prague at placa@bloomberg.net
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