Consumer price inflation in the Czech Republic continued its downward trend in September, easing to 2.3 percent year-on-year from 2.5 percent in August. The Czech Statistical Office (ČSÚ) confirmed its preliminary estimate on Friday, marking the third consecutive month of declining inflation. It was the lowest rate since April, when inflation reached 1.8 percent. Month-on-month, consumer prices fell by 0.6 percent.
Food prices played a crucial role in the moderation. According to Pavla Šedivá, head of the consumer price statistics department at ČSÚ, food prices have been decelerating since July, with the year-on-year increase slowing to 2.7 percent in September. Compared to August, food prices dropped by 1.1 percent. Meat prices rose by just 4.4 percent year-on-year, down from 7 percent in August, while butter’s price increase moderated to 5.2 percent from 11.3 percent. Semi-skimmed long-life milk fell by nearly 10 percent, and vegetables were about 8 percent cheaper. However, eggs surged by nearly 40 percent, while chocolate products, coffee, and cocoa all rose by around 10 to 20 percent.
Housing costs remained the largest contributor to overall inflation. Rent increased by 5.7 percent year-on-year, water charges rose 4.2 percent, sewage costs climbed 3.7 percent, and heating and hot water prices were up 2.2 percent. On the positive side, electricity prices fell 3.5 percent and natural gas dropped 8.5 percent. Recreation and cultural services became 6.3 percent more expensive, while package holidays rose by 5 percent. Clothing and footwear, by contrast, became cheaper.
The inflation trajectory this year has been relatively stable. The peak came in June at 2.9 percent, followed by a gradual decline through July (2.7 percent) and August (2.5 percent). Miroslav Novák, chief economist at Citfin, noted that while September’s consumer price decline was more pronounced than expected, it was concentrated almost exclusively in food prices. He suggested this wouldn’t prompt the Czech National Bank to reconsider its monetary policy stance, especially given that food prices are highly volatile and could rise again in the fourth quarter.
Energy prices continue to provide the main deflationary pressure, though deflation moderated in September, according to Raiffeisenbank analyst Martin Kron. He emphasized that service prices remain the primary driver of higher inflation. Meanwhile, foreign trade data for August showed both export and import prices declining year-on-year and month-on-month, heavily influenced by the strengthening of the Czech crown against the euro and dollar.