“The acceleration of year-on-year price growth to 8.5 percent in October was primarily due to last year’s effect of the energy-saving tariff on electricity prices. If we did not include this cost-saving tariff in the calculation, the price increase would be 5.8 percent,” said Pavla Šedivá, head of the Consumer Price Statistics Department of the CZSO.
As the Czech National Bank pointed out on its blog, as a result of the introduction of the austerity tariff last October, the price of the consumer basket fell compared to the previous month, the most in Czech history, and then jumped up again to a record high in January after the austerity tariff ended. Therefore, purely mathematically, October year-on-year inflation moved to a higher level.
Rents and food have become more expensive
In October, prices in the housing section had the greatest influence on the year-on-year increase in price levels, where, in addition to the above, apartment rents rose by 7.9 percent. Prices in the food and non-alcoholic beverages section were second in order of influence, with an increase of 3.7 percent.
The inflation rate in the eurozone fell to 2.9 percent in October
“Compared to last year, we mainly pay more for energy, rent, food in restaurants, accommodation in hotels, clothes and shoes, health, and basically only fuel is cheaper so far,” commented Petr Dufek, an economist at Creditas bank.
A sharp decline is expected
According to him, in any case, inflation will fall sharply at the beginning of next year, but for now one can only speculate whether it will start with a four, a three, or even a two. It is not only about new price lists of goods, but also about energy and related fees, which are currently in question.
“Even before the Christmas holidays, however, we could still wait for a drop in inflation. It is affected not only by slightly more favorable cost conditions among manufacturers, but also by long-term weak demand, the result of which are full warehouses of unsold goods,” added Dufek.
Energy expenditure decreased month-on-month
Between months, there was a delay in foods such as pork, eggs or semi-skimmed milk and butter, as well as fruit and vegetables. The increase in prices in the clothing and footwear section was primarily seasonal in view of the approaching cold months.
“On the contrary, between September and October, prices in the housing, water, energy and fuel section fell, primarily due to a drop in the prices of electricity, natural gas and heat and hot water,” pointed out Akcenta analyst Miroslav Novák.