Czech inflation slows in December, 2017 price rises at 2.5 percent

Foto: Lenka Žižková

The pace of annual Czech inflation slowed in December to 2.4 percent from November’s 2.6 percent.

Photo: Lenka Žižková,  Radio Prague International
But that did not appreciably cut the final 2017 figure for inflation in the country. It came in at 2.5 percent for the whole year. That’s the highest level for the previous five years. The factors fuelling that figure are pretty evenly divided: the rate of rise for services was 2.9 percent with price rises for goods averaging out at 2.2 percent.

The 2017 figure is ahead of the Czech National Bank’s target figure of a 2.0 percent inflation rate. And while it is not so much higher than the central bank’s ideal figure, it will still likely be enough to encourage the bank to continue with a gradual increase in interest rates already started at the end of last year.

Preliminary European figures for consumer price inflation in November put the Czech rate for the previous year at 2.2 percent. That’s among the higher rates of price rises across the EU-28 but well short of Estonia, with a 4.5 percent annual increase and Lithuania with a 4.2 percent rate. Near neighbour Slovakia came in at 2.1 percent and the rate in the Czech Republic’s biggest trading partner, Germany, was 1.8 percent.

The latest monthly rate for inflation from November to December was 0.1 percent. Some of the biggest factors pushing prices higher was more expensive food and alcohol with some of those increases cushioned by cheaper clothes and footwear.

One of the biggest reasons for the slight slowdown in December’s rate of year on year inflation was the fact that fuel prices advanced at less than half the rate of the previous month. December’s 1.5 percent rises compared with November’s 3.7 percent.

But the rate of increases in some basic grocery items in the 12 months to December give an idea how much many staple foodstuffs have soared in price over the last year. Flour has seen a 13.5 percent increase, eggs are more than 54 percent more expensive, yoghurt is over 21 percent dearer, butter up by 28.7 percent, and fruit by 10.8 percent.