Inflation approaches the CNB’s forecast and target in May 2024
The CNB comments on the May 2024 inflation figures
According to figures released today, the price level increased by 2.6% year on year in May 2024. Annual consumer price inflation slowed by 0.3 percentage point compared to the previous month. Following an increase in April, inflation approached the CNB’s 2% target again.
Annual inflation was just 0.1 percentage point higher in May than the CNB’s spring forecast. The visible upward deviation from the forecast recorded in April this year thus decreased substantially with the subsequent developments in May. The persistence in May of only a small positive difference compared to the forecast continued to be driven mainly by volatile food prices, which fell less than expected year on year. Growth in administered prices was also somewhat stronger than forecasted. Significantly lower growth in fuel prices and a further slight drop in core inflation had the opposite effect.
May 2024
year-on-year in %
MPR Spring 2024
actual value
CPI
2.5
2.6
Administered prices
5.4
5.9
First-round impacts of changes to indirect taxes
0.1
0.1
Adjusted for changes to indirect taxes
Prices of food, beverages, tobacco
-1.0
-0.1
Core inflation
2.7
2.5
Fuel prices
14.3
9.8
Monetary policy-relevant inflation
2.3
2.5
Core inflation has been fading for the second consecutive year, reflecting low growth in prices of foreign inputs, but also the previous long-running downturn in domestic demand due among other factors to tight CNB monetary policy. This is fostering a decrease in the profit mark-ups of producers, retailers and service providers over their costs. This contributed to a halt in growth in goods prices in May. By contrast, growth in services prices accelerated slightly and thus remains elevated. The growth in imputed rent remained low due to an only gradual recovery on the property market.
Following a one-off increase, food prices fell slightly again due to declining global agricultural commodity prices and domestic agricultural producer prices. Year-on-year growth in fuel prices remains elevated. However, fuel prices declined compared to the previous month thanks to a decline in oil prices on global markets and appreciation of the koruna. In line with expectations, year-on-year growth in administered prices slowed somewhat in May owing to a decrease in housing-related energy prices.
In month-on-month terms, the price level was unchanged in May. Insignificant price movements recorded in most consumer basket categories offset each other. Annual inflation in May was broadly in line with the CNB’s spring forecast. According to the forecast, inflation will be close to the 2% target throughout this year.
Petr Král, Executive Director, Monetary Department
Inflation approaches the CNB’s forecast and target in May 2024
The CNB comments on the May 2024 inflation figures
According to figures released today, the price level increased by 2.6% year on year in May 2024. Annual consumer price inflation slowed by 0.3 percentage point compared to the previous month. Following an increase in April, inflation approached the CNB’s 2% target again.
Annual inflation was just 0.1 percentage point higher in May than the CNB’s spring forecast. The visible upward deviation from the forecast recorded in April this year thus decreased substantially with the subsequent developments in May. The persistence in May of only a small positive difference compared to the forecast continued to be driven mainly by volatile food prices, which fell less than expected year on year. Growth in administered prices was also somewhat stronger than forecasted. Significantly lower growth in fuel prices and a further slight drop in core inflation had the opposite effect.
Core inflation has been fading for the second consecutive year, reflecting low growth in prices of foreign inputs, but also the previous long-running downturn in domestic demand due among other factors to tight CNB monetary policy. This is fostering a decrease in the profit mark-ups of producers, retailers and service providers over their costs. This contributed to a halt in growth in goods prices in May. By contrast, growth in services prices accelerated slightly and thus remains elevated. The growth in imputed rent remained low due to an only gradual recovery on the property market.
Following a one-off increase, food prices fell slightly again due to declining global agricultural commodity prices and domestic agricultural producer prices. Year-on-year growth in fuel prices remains elevated. However, fuel prices declined compared to the previous month thanks to a decline in oil prices on global markets and appreciation of the koruna. In line with expectations, year-on-year growth in administered prices slowed somewhat in May owing to a decrease in housing-related energy prices.
In month-on-month terms, the price level was unchanged in May. Insignificant price movements recorded in most consumer basket categories offset each other. Annual inflation in May was broadly in line with the CNB’s spring forecast. According to the forecast, inflation will be close to the 2% target throughout this year.
Petr Král, Executive Director, Monetary Department