The pace of consumer price growth in the Czech Republic is accelerating. Prices increased by 4.1 percent year on year in August, the most since November 2008. Fuel, butter, and vegetables became the most expensive. This is according to the latest data from the Czech Statistical Office.
Statisticians said that higher prices mainly influenced the acceleration of price growth in August in the housing and food and non-alcoholic beverages sections. The biggest year-on-year increase was in fuel and oil, which increased 19%. Prices of butter (up 12.4 %), footwear (8.6%), vegetables (7%), as well as eggs (5.8%), and water and sewerage charges (5.5%) also rose significantly.
The inflation rate in the Czech Republic is the highest in 13 years. “The prices of goods and services from almost all sections of the consumer basket contributed to this development. Prices of goods increased by 3.6 percent and prices of services by almost five percent compared to last August,” said Pavla Šedivá, head of the consumer price statistics department at the Czech Statistical Office, in a press release.
Almost five percent at the end of the year
The acceleration of inflation in August was also a surprise for analysts. “The year-on-year inflation rate rose to 4.1 from the previous rate of 3.4 percent, while an average result of around 3.6 percent was expected. Inflation is even a full one percentage point above the Czech National Bank’s forecast,” Michal Brožka, an analyst at Komerční Banka, mentioned. According to him, the August result indicates annual inflation of 4.7 percent at the end of the year.
Jakub Seidler, a chief economist at the Czech Banking Association, points out that the current inflation figure is partly influenced by the low comparative base of last year. “However, the current development brings several strong inflationary factors. Further inflation growth will be mainly associated with energy and other commodity prices, ” he said.