Consumer prices in the Czech Republic ended 2024 with a 3% year-over-year increase, up from November’s 2.8%, though falling short of analysts’ expectations. The Czech Statistical Office reported a monthly decrease of 0.3%, with the annual average inflation rate settling at 2.4% for 2024 – a significant improvement from 2023’s 10.7%.
The service sector emerged as the primary driver of inflation, with prices surging 5.1% while goods saw a modest 0.9% increase. Trinity Bank’s chief economist Lukáš Kovanda attributes the lower-than-expected figures to weak household consumption, which remains nearly 5% below pre-pandemic levels.
Housing costs continue to lead price increases, with sewage charges jumping 13.5%, water rates rising 11%, and electricity costs climbing 8%. However, natural gas prices provided some relief, dropping by 5.5%. The real estate market remains a concern, with housing prices expected to maintain their upward trajectory through 2025.
In the food sector, significant price hikes were observed in eggs (36.3%), oils and fats (16.9%), and chocolate (28%), while fuel prices offered some respite, declining by 2.6%. The hospitality sector saw accommodation services increase by nearly 10%, contributing to an overall service sector inflation of 5%.
Perhaps most striking is the long-term trend in hospitality services, which have experienced a staggering 45% price increase over the past three years, and an even more dramatic 63% surge over five years.