Czech CPI Annual Inflation Edges Up In August

Sep 10, 2007 - Czech consumer prices rose 2.4% on an annual basis in August, the statistical office said, Monday. This matched economists' consensus of 2.4% rise. Consumer prices grew 2.3% in July. Consumer prices advanced 0.3% on a monthly basis, in August compared to the rise of 0.4% in the previous month. Economists were looking for a rise of 0.2% in August.

On an annual basis, prices of alcoholic beverages and tobacco grew 1.2% in August, pushed by the 26.6% surge in prices of tobacco products. Prices of non-alcoholic beverages advanced 0.5%, compared to the rise of 0.4% in the previous month. Prices of clothing and footwear remained unchanged. Housing, water, electricity, gas and other fuels prices grew 0.9%, slightly more than the prices rise of 0.8% in the earlier month.

Transport prices declined 0.1% annually in August, the same as in the previous month. Communications prices slipped 0.1% after remaining unchanged in the earlier month. Prices in the recreation and culture sector eased 0.3% after sliding 0.1% in the previous month.

In August, prices of goods advanced 2.5% and prices of services grew 2.3%.

The inflation rate in the twelve months to August slowed to 2.0%, from 2.1% in the twelve months to July. The Harmonized Index of Consumer Prices, HICP, rose 2.6% annually in August, slightly more than the increase of 2.5% in July. On a monthly basis, the HICP rose 0.3% in August.

Though there was a moderate acceleration in inflation in August, yet it remained well within the Central Bank's target of 3%, and lower than their projection of a 2.6% rise, the Danske Bank said. With the Czech koruna strengthening, and inflation lower than expected, there might be a pause in the current phase of monetary tightening, the Danske Bank observed. However, further hikes at the end of the year could not be ruled out the, Danske Bank said.

The Harmonized CPI for EU purposes moved up 0.3% monthly in August. The HICP annual inflation rate edged up to 2.6% in August from the 2.5% seen in July.