In July, the month-on-month inflation rate rose to 17.5 percent

The Czech Republic’s annual inflation rate increased to 17.5 percent in July, up 0.3 percentage points from June. The Czech Statistical Office (CSO) published the data on Wednesday.

“Compared to last month, prices rose by 1.3 percent, which was the most moderate month-on-month increase since February this year,” said Pavla Šedivá, head of the consumer price statistics department at the Czech Statistical Office.

According to the CSO, the month-on-month price development was mainly influenced by higher prices in the recreation and culture sections. Holidays with all-inclusive services become 23% more expensive. In contrast, in the housing section, electricity rose by “only” one and a half percent, gas by 1.3 percent, and solid fuels by 5.7 percent.

Prices for goods increased by a fifth year on year, while prices for services increased by 14%. Statistics recorded the highest year-on-year price increases for energy and food.

Food and non-alcoholic beverages rose by 19.3 percent year on year, meat by 21.7 percent, and oils and fats by 53.4 percent. Flour increased by 64.1 percent, bread increased by 29.9 percent, semi-skimmed long-life milk increased by 40.2 percent, and butter increased by 60.9 percent.

Electricity prices increased by 33.6 percent year on year, natural gas by 59.8 percent, and solid fuels by 41.1 percent. On the other hand, fuel and oil prices increased by 43.6 percent (47.5 percent in June).

Forecasts had anticipated a higher increase

According to Akcenta analyst Miroslav Novák, the price growth surprised him, as evidenced by the Czech National Bank’s (CNB) forecast of 18.8 percent annual growth for July.

“However, the joy of flattening inflation is premature. The peak in consumer inflation is still ahead of us, and there will be a more significant increase towards 20 percent in August, given the further rise in household electricity and gas prices,” Novák added.

According to the CNB’s new forecast, inflation in the Czech Republic is expected to reach 20 percent in the autumn, while the annual average will be 16.5 percent. The central bank announced last week after the board decided at its monetary policy meeting to keep interest rates at their current level. The base interest rate thus remained at seven percent.