Inflation falls sharply and returns to the CNB’s 2% target in January 2024
The CNB comments on the January 2024 inflation figures
According to figures released today, annual inflation dropped to 2.3% in January 2024, falling close to the 2% target for the first time in more than two years. Annual inflation fell by 4.6 percentage points compared to the previous month. The fade-out of the statistical effect of the energy savings tariff contributed to the sharp slowdown in annual inflation. The fall in inflation was due to the CNB’s tight monetary policy and the weak domestic economic activity. An update of the weights in the consumer basket also had a slight anti-inflationary effect.
Annual inflation was 0.7 percentage point lower in January than the CNB’s winter forecast. Compared to the forecast, there was a bigger slowdown in administered price inflation. Core inflation was also much lower. A smaller decline in prices of food, beverages and tobacco had the opposite effect. Fuel prices also declined somewhat less than forecasted. The first-round effects of changes to indirect taxes were slightly higher than predicted.
January 2024
year-on-year in %
MPR Winter 2024
actual value
CPI
3.0
2.3
Administered prices
8.4
6.0
First-round impacts of changes to indirect taxes
0.0
0.1
Adjusted for changes to indirect taxes
Prices of food, beverages, tobacco
-1.3
-0.1
Core inflation
3.8
2.9
Fuel prices
-3.2
-2.8
Monetary policy-relevant inflation
3.0
2.2
Core inflation slowed sharply in January. It has been falling gradually for more than a year now, reflecting low growth in prices of foreign inputs and a cooling of domestic demand due to a restrictive monetary policy stance. Subdued economic activity caused a decline in the profit margins of producers, retailers and service providers. Growth in goods and services prices slowed, including imputed rent.
Annual food price inflation turned negative in January. This was due to declining global agricultural commodity prices and domestic agricultural producer prices, as well as subdued consumer demand. Fuel prices also continued to decrease year on year.
In month-on-month terms, the price level increased by 1.5% in January. The intensity of the usual repricing at the start of the year has been below the assumptions of the winter forecast so far. According to the forecast, inflation will be close to the 2% target throughout this year.
Jakub Matějů, Deputy Executive Director, Monetary Department
Inflation falls sharply and returns to the CNB’s 2% target in January 2024
The CNB comments on the January 2024 inflation figures
According to figures released today, annual inflation dropped to 2.3% in January 2024, falling close to the 2% target for the first time in more than two years. Annual inflation fell by 4.6 percentage points compared to the previous month. The fade-out of the statistical effect of the energy savings tariff contributed to the sharp slowdown in annual inflation. The fall in inflation was due to the CNB’s tight monetary policy and the weak domestic economic activity. An update of the weights in the consumer basket also had a slight anti-inflationary effect.
Annual inflation was 0.7 percentage point lower in January than the CNB’s winter forecast. Compared to the forecast, there was a bigger slowdown in administered price inflation. Core inflation was also much lower. A smaller decline in prices of food, beverages and tobacco had the opposite effect. Fuel prices also declined somewhat less than forecasted. The first-round effects of changes to indirect taxes were slightly higher than predicted.
Core inflation slowed sharply in January. It has been falling gradually for more than a year now, reflecting low growth in prices of foreign inputs and a cooling of domestic demand due to a restrictive monetary policy stance. Subdued economic activity caused a decline in the profit margins of producers, retailers and service providers. Growth in goods and services prices slowed, including imputed rent.
Annual food price inflation turned negative in January. This was due to declining global agricultural commodity prices and domestic agricultural producer prices, as well as subdued consumer demand. Fuel prices also continued to decrease year on year.
In month-on-month terms, the price level increased by 1.5% in January. The intensity of the usual repricing at the start of the year has been below the assumptions of the winter forecast so far. According to the forecast, inflation will be close to the 2% target throughout this year.
Jakub Matějů, Deputy Executive Director, Monetary Department