According to the Czech Statistical Office, inflation in the Czech Republic has fallen below ten percent for the first time in a year and a half. The annual growth rate of consumer prices reached 9.7 percent in June, down 1.4 percentage points from May. This is unsurprising, as analysts had predicted a drop below 10 percent for June.
The categories of food and non-alcoholic beverages and housing influenced inflation. Meat and cheese prices decreased, while oils and fats dropped by 4.3 percent. Prices for natural gas and solid fuels also decreased. On the other hand, transportation prices have significantly contributed to reducing the overall price level for four consecutive months. The prices of fuels and oils decreased by 25 percent.
The housing category significantly impacted the inflation rate, with rental prices increasing by 6.9 percent and water by 16.3 percent. Prices of electricity and heat and hot water also rose significantly.
Regarding food and beverages, egg prices have increased by 28.8 percent, margarine and other vegetable fats by 17.1 percent, fruit by 15.2 percent, vegetables by 28.2 percent, and sugar by 50.3 percent.
In the recreation and culture category, prices of holidays with comprehensive services increased by 14.4 percent, while prices of catering and accommodation services increased by 13.8 percent and 13.5 percent, respectively.
In the comparison between May and June, the prices of potatoes and seasonal prices of holidays with comprehensive services increased. This is not the target inflation rate for the Czech government. According to Fiala, the inflation rate must be tamed further.
The decrease in inflation is a positive sign for the economy and the people of the Czech Republic. While some food prices have increased significantly, the decrease in overall inflation will relieve consumers. It remains to be seen whether this trend will continue or if inflation will rise again.