Producer prices in the Czech Republic rose for the fourth time in a row in May, increasing by 5.1 percent year on year. Their growth has accelerated further. Compared to last May, agricultural prices were also 4.4 percent higher. Construction work and market services for companies were also more expensive, according to data from the Czech Statistical Office. Prices in industry, agriculture, and construction were also higher month-on-month, while prices of services continued to stagnate at the level of the previous month.
Producer prices indicate the future development of consumer prices. The consumer inflation rate fell to 2.9 percent in May from 3.1 percent in April. The rise in prices in May was mainly due to higher fuel prices, while the number of foods fell further year on year.
Producer prices indicate the future development of consumer prices. The consumer inflation rate fell to 2.9 percent in May from 3.1 percent in April. The rise in prices in May was mainly due to higher fuel prices.
“Although the overall rise in industrial producer prices in May was above market expectations and also above the CNB’s expectations, the structure shows that the acceleration in price growth did not affect all sectors and in this sense, the development was less dramatic than the overall result suggests,” said the chief economist. Generali Investments CEE Radomír Jáč.
According to Komerční banka economist Michal Brožka, today’s data could force hesitant members of the CNB’s Bank Board to raise interest rates earlier, ie next week. “Our forecast of industrial producer prices for this year showed an increase of 3.3 percent, with the main driver being the higher price of oil. However, the development so far shows a year-round rate of close to 4.5 percent,” he said.
Industrial producer prices stagnated last December and this year in January, and since then their year-on-year growth rate has been accelerating. May’s growth of 5.1 percent is the same as the April increase in prices in the industry by 4.6 percent, the strongest since November 2011. In May, higher than last year, oil and natural gas prices were almost two-thirds higher and chemicals and products 43.3 percent. Prices of metals and metal products increased by more than a tenth. Prices of transport equipment fell by 3.7 percent, while prices of food products, beverages, and tobacco fell by almost one percent.
In agriculture, year-on-year price growth accelerated to 4.4 percent from 1.3 percent in April. In crop, production prices rose by 10.4 percent, in animal production they fell by 1.5 percent.
According to CZSO estimates, construction work prices rose by 2.7 percent year on year in May and grew by two-tenths of a percentage point more slowly in April. Prices of materials and products consumed in construction were up 7.8 percent year-on-year in May.
Year-on-year growth in market services for businesses also accelerated to 1.1 percent in May from 0.8 percent in April. Employment services and security and search services became the most expensive, while prices for information services and advertising services, and market research fell.
Compared to April, prices in industry increased by 0.9 percent, similar to the year-on-year comparison, mainly for metals and chemicals. Agricultural producer prices rose by 2.9 percent month on month due to higher prices of oilseeds, poultry, and pigs for slaughter. Compared to April, construction work rose by an estimated 0.3 percent, while prices of market services for companies did not change.