Czech Republic: Inflation climbs further in June
Consumer prices rose 1.58% from the previous month in June, decelerating slightly from may’s 1.76% increase. The softer print was largely due to a milder increase in prices for food.
Inflation rose to 17.2% in June, above May’s 16.0%. June’s result was the highest inflation rate on record. Meanwhile, the trend pointed up, with annual average inflation coming in at 9.4% in June (May: 8.2%).
Commenting on the short-term outlook, Frantisek Taborsky, analyst at ING, stated:
“Although the CNB’s spring forecast shows June inflation as a peak, we expect inflation to rise further not only because of continued general inflationary pressures but mainly because of the recently announced energy price increases by major suppliers in the Czech Republic. These changes should feed through to inflation mainly in July and August, but given the uncertain mix of fixed and floating contracts, we can expect a second round of this effect in the coming months and a further jump in the New Year repricing in January. Our current nowcast shows inflation rising further to 17.8% in July, however, given the above we could see a much bigger jump and we could see inflation very close to 20% YoY over the next three months. “