In an unexpected turn of events, the Czech Republic’s consumer price growth has accelerated, with the annual inflation rate climbing to 2.6% in September, up from August’s 2.2%. This surge, as reported by the Czech Statistical Office (ČSÚ), marks a significant shift in the country’s economic landscape.
Perhaps the most striking development is the first year-on-year increase in food prices since last November. While August saw food and non-alcoholic beverage prices drop by 1.8% year-on-year, September witnessed a 0.6% rise. Pavla Šedivá, head of the Consumer Price Statistics Department at ČSÚ, highlighted some dramatic price hikes: “For instance, semi-skimmed long-life milk prices were about 20% higher in September compared to last year, butter approximately 43% higher, and chocolate products 22% higher.”
However, it’s not all doom and gloom for consumers. Fuel prices have seen a significant drop, with September’s figures showing a year-on-year decrease of more than 11%. Additionally, natural gas prices were about 4% lower compared to last year.
The housing sector continues to be a major driver of inflation. Water supply costs increased by about 10%, sewerage by 13%, and electricity by nearly 9%. The service sector is also feeling the heat, with prices rising by a solid 5% year-on-year, while goods prices only increased by 1.2%.
The hospitality industry seems to be riding a wave of price hikes since the COVID-19 pandemic. Petr Dufek, chief economist at Banka Creditas, noted, “Compared to 2019, prices for accommodation and catering services are on average 65% higher.” This trend is reflected in the current figures, with catering services prices up by almost 7% and accommodation services soaring by nearly 9%.
Looking ahead, experts are keeping a close eye on the real estate market. While current price increases in housing are symbolic, Dufek warns that it’s only a matter of time before the booming real estate market makes a more visible impact. For now, rents continue their brisk growth, increasing by more than 6%.
As the Czech Republic grapples with these economic shifts, consumers and policymakers alike will need to stay vigilant and adaptive in the face of changing prices and market dynamics.