Consumer prices in the Czech Republic rose by 2.9 percent year-on-year in June, marking the highest inflation rate so far this year, according to the Czech Statistical Office. Monthly inflation increased by 0.3 percent compared to May, confirming preliminary estimates released last week.
Food prices have emerged as the primary driver behind this inflationary spike, with notable increases in fats, dairy products, and fruits. Pavla Šedivá, head of the Consumer Price Statistics Department, noted that June’s figures represent the highest value since December of last year.
According to Petr Dufek, an economist at Creditas Bank, the inflation jump can be attributed to both continuing inflationary trends and a low comparative base from June last year. He points out that consumers will likely need to wait for the domestic harvest to potentially reduce prices of plant-based products.
Services and rental costs continue their upward trajectory, forming a second concerning trend in the Czech economy. However, falling fuel prices and more favorable electricity and gas tariffs that households are adopting have helped moderate the overall inflation rate.
Analysts believe that June likely represents this year’s inflation peak, with expectations of moderation in the coming months. Radomír Jáč, chief economist at Generali Investments CEE, suggests that both the development of the Czech koruna exchange rate and trends in global commodity prices will contribute to calming inflation in the second half of this year.