There is no end to the price rise in the Czech Republic. The cause is expensive energy, which puts more and more pressure on the consumer basket.
Significantly more expensive gas and electricity are hitting manufacturing, housing, and all other services, from hairdressers to restaurateurs. Fertilizer production cannot be done without gas, so crops and products, including animal feed, are expensive. That is why people pay more not only for meat and milk but also for butter and lard.
After slowing down at the end of the summer, price increases have accelerated again. Annual inflation rose from 17.2 percent in August to 18 percent. It was last that high in December 1993. The month-on-month acceleration in consumer price inflation from 0.4 percent in August to 0.8 percent is also bad news.
The Czech Statistical Office (CSO) confirmed on Tuesday that in both year-on-year and month-on-month comparisons, the rise in energy prices contributed most to the September increase.
Over the month, natural gas prices increased by 15.2 percent, electricity by 3.6 percent, solid fuels by 6.9 percent, and heat and hot water by 0.8 percent.
Natural gas prices increased by 85.9 percent yearly, while electricity prices increased by 37.8 percent. Even heating with purchased wood or coal is not a big win with the current price increases.
Prices of solid fuels have risen by a significant 55.8 percent year-on-year. Households also pay significantly more for rent, water, sewerage, and heat. The increase in food prices is also enormous.
Compared to September last year, meat was 23.6 percent more expensive, while milk, cheese, and eggs were 25.8 percent more expensive on average, representing acceleration in price growth compared to August.
The price of flour increased by 61 percent, and semi-skimmed long-life milk and butter by more than half.
An ordinary 1,200-gram peck of consumer bread now costs around CZK 45 in shops, while six months ago, it was about CZK 10. For a liter of sunflower oil, a person in a shop will usually pay CZK 70, roughly CZK 6 more than in March and CZK 20 more than in January.
The peak in sight?
The price of sugar is also rising, which is also due to the cost of sugar beet rising due to fertilizers becoming several times more expensive, reflecting the rise in gas and diesel needed to power agricultural machinery.
Catering, for example, has increased in price by 26 percent in the last year. Car prices are up 15.6% year on year. Fuel price increases have slowed from 28.3 percent in August to 22.7 percent in September.
According to analysts, companies still have high inflation expectations, which complicates a low inflation level return. At the same time, the government’s help with high energy prices will start to take effect.
People are cutting back.
Analysts agree that the next inflation dampener will be a significant economic slowdown, further curbing household purchases. According to a survey prepared by STEM/MARK for Anytime, 88 percent of Czechs are already noticeably affected by the current rise in price, especially for energy, fuel, and other vital commodities.
Pensions were also given two extraordinary increases this year due to inflation. As part of the next January indexation, the average old-age pension will increase by CZK 825. According to the Ministry of Labour and Social Affairs, talking about another extraordinary valorization is still premature.