Consumer prices rose 3.1 percent year on year in April, the most since last September. The largest share in this is the increase in the price of fuels and tobacco products. The previous month’s annual inflation was 2.3 percent. Exceeding the 3% mark in April is surprising, according to economists, however, according to them, year-on-year inflation will remain at the 3 percent mark in the coming months. In addition, inflation in April was 0.2 percentage point higher than estimated by the Czech National Bank in last week’s new forecast.
Compared to March, prices rose by 0.5 percent in April, due to higher prices of alcoholic and non-alcoholic beverages, tobacco and food.
In April, fuel and oil prices rose by 16.3 percent year on year, spirits rose by 5.1 percent, beer by 8.5 percent and tobacco products by 19.5 percent. Compared to the same period last year, cars also rose in price, rental prices in flats, water and sewerage, on the other hand, prices of electricity and natural gas fell, for example.
According to some economists, the easing of restrictions in the economy and the associated opening of shops and restaurants may also contribute to rising inflation in the coming months. “It has been confirmed that inflation will gradually rise above 3% this year. It will be even more pronounced in those segments that will be hardest hit by the covid in the last year of life, such as tourism or hospitality and accommodation services. I can imagine that in these sectors the rise in prices may rise to double-digit numbers in the short term, “said PwC partner and monetary policy expert Olga Cilečková.
At the same time, analysts warned today that rising inflation is not just a local issue. Prices are rising worldwide, among other things due to supply chain outages as a result of a pandemic. The low comparison base from last year also plays a role.
“In April this year, year-on-year growth in fuel prices accelerated significantly across Europe, which was due to the low base effect represented by the development of these prices in April last year,” said Radomír Jáč, chief economist at Generali Investments CEE. Year-on-year inflation rose to 4.3 percent in Poland and 5.1 percent in Hungary. “In the case of the Czech economy, headline inflation could stabilize in the coming months, but it will remain in the area of three percent and at the very end of this year it will probably increase even more temporarily,” he added.
Inflation in the Czech Republic has been steadily declining from last July to March this year, when the slowdown in year-on-year consumer price inflation came to a halt after seven months.