In an unprecedented development, consumer prices in the Czech Republic have continued to decline even into February. The annual inflation rate for February has reached a mere two percent, down from January’s 2.3 percent. This is the first time since December 2018 that the Czech National Bank’s inflation target has been met. The Czech Statistical Office (CSÚ) made this data public on Monday.
The slowing inflation rate can primarily be attributed to a drop in food prices, non-alcoholic beverages, and tobacco prices. For instance, vegetable prices, showing double-digit growth in January, fell by a tenth of a percent in February. Price drops were also recorded for other food items. Sugar and flour became approximately a fifth cheaper, semi-skimmed long-lasting milk almost a quarter cheaper, poultry meat by more than 16 percent, and eggs by 30.7 percent.
On the contrary, housing costs applied upward pressure. Water and sewerage prices increased by more than a tenth year-on-year, and electricity by more than 13 percent. Also more expensive were catering services (+8.7 percent) and accommodation services (+9.7 percent).
In monthly comparison, inflation reached 0.3 percent, with fuel prices increasing by 4.3 percent, having the most significant impact on price growth. “After several months of decline, fuel prices have returned to growth. Diesel was selling for approximately 38.10 CZK/l on average at petrol stations in February, and Natural 95 petrol for almost 37.80 CZK/l,” said Pavla Šedivá, head of the CSÚ’s consumer price statistics department.
“February’s inflation results confirm that the inflation wave is receding. However, inflation is not completely passed, as evidenced by the still rapid price increase of services, which according to the statistical office exceeds the five percent mark, or the continuing price increases in the catering and accommodation sectors,” commented Petr Dufek, chief economist at Creditas Bank, on the February inflation figures.