Czechia experiencing sharp rise in inflation, prices of food expected to rise
Consumer prices have been growing at an unusually high rate for three months in the Czech Republic. The latest data for September, published by the Czech Statistics Agency, showed inflation grew by 4.9 percent in September. Some foodstuff producers are now considering raising their prices by up to a tenth, the Czech News Agency reports.
The September inflation rise was the biggest since 2008 and about 1.7 percentage points higher than forecast by the Czech National Bank. The rise in prices was most affected by the increased cost of housing and transport, according to the Czech Statistics Agency. In response, the Czech National Bank was forced to raise interest rates by 0.75 percent last month.
Chief economist of Patria Finance Jan Bureš told news site Seznam Zprávy that inflation could slightly exceed 6 percent by the end of the year, highlighting that the rise in energy prices, particularly gas, could make the difference. However, other economists were slightly more conservative in their estimates.
In general, analysts questioned by Seznam Zprávy said that inflation could hit its peak at the beginning of 2022 after which it will start slowing down.
The phenomenon is likely to project itself into the cost of food. The country‘s major agricultural producer Agrofert has noticed a dramatic rise in the prices of packaging, foils, plastics, wheat and cooking oils, company spokesman Karel Hanzelka told the Czech News Agency. He said that Agrofert will likely be forced to increase the prices of its foodstuffs, but was unwilling to be more specific. Price adjustments will first be discussed with wholesalers, the Agrofert spokesman said.
Flosman, a company which operates the network of Flop grocery stores in the Czech Republic, has still avoided raising prices. However, Flosman executive director Michal Andrle told the Czech News Agency that he expects prices will now have to be raised by 5 to 10 percent. He expects the highest increase in the prices of vegetables and fruits.
Meanwhile, milk producer Choceňská mlékárna expects it will have to raise its prices next year. Company director Pavel Marek told the Czech News Agency that the rise will not exceed 10 percent, but that subsequent supermarket margins may increase the final cost paid by consumers further. He said that this is a consequence of the rise in the prices of raw materials, plastics, paper, aluminium packaging and transport. The company also plans to raise salaries.