According to publications from the Czech Statistical Office, the inflation rate in January showed a decrease. This helped boost consumer confidence for the year ahead.
As stated by Prime Minister Petr Fiala, “Inflation of 2.3% is almost a third of what our government recorded in December 2021 after Andrej Babiš’s tenure, when inflation was 6.6%. This ratio means an optimistic outlook until 2024.” As previously predicted by analysts, several fiscal measures have had a positive effect on prices, allowing inflation to fall by more than 4 percentage points and bringing the figure within the tolerance range provided by the Central Bank’s monetary policy.
Consumer prices in January
This reduction is mainly attributable to the stabilization of energy and food prices in January.
| Month by month comparison | Year-on-year comparison | |
| Electricity | + 12,1% | + 13,3% |
| Water supply | + 10,9% | +10,9% |
| Natural gas | + 3,6% | – 6,5% |
| Wastewater | + 13,4% | +10,9% |
| Rentals | + 0,9% | + 7% |
| Materials and services for home maintenance and repair | + 1,5% | + 5,3% |
| Wine | + 10% | + 5% |
| Beer | + 6,6% | + 4% |
| Non-alcoholic beverages | + 3,9% | -3,9% |
| Vacation packages | + 7% | + 3,4% |
| Fruit | + 5% | + 1,1% |
| Vegetables | + 2,4% | + 13,3% |
| Catering services | + 1,6% | 8,5% |
| Bread | -3,5% | -23,6% |
| Smoked meat and sausages | – 2,4% | – 6,6% |
| Sugar | – 8,2 %, | – 21,9% |
The recently released data shows a monthly increase of 1.5 % in consumer prices. This change is largely attributable to the rise in the housing sector, particularly in electricity, water, and gas, as well as in the alcoholic beverages and tobacco sector. On the other hand, having the greatest influence on the decline in the overall index was the food area, where there was a significant lowering of prices, aided in part by the VAT cut on certain key products.
Also according to the reported data and the head of the CZSO Consumer Price Statistics Unit, Pavla Sediva, “Consumer prices in January significantly slowed their growth on a monthly basis to 2.3%, which is the lowest value since March 2021. This development stems mainly from housing and food prices and a higher benchmark over the past year.” Even comparing the data over the year, the biggest influence driving the rise in consumer prices came from the real estate sector mainly due to the rise in rental prices.
Harmonized consumer price index
Comparison between the Czech Republic and the euro area shows a marked change in the HICP (Harmonized Index of Consumer Prices) in January 2024. In the Czech country, the monthly increase touched 1.8%, which is close to Eurostat’s forecast for the euro area of 2.8% for January, slightly lower than December’s 2.9%. Analyzing previous developments in the EU27 as a whole, December saw annual HICP growth of 3.4%, up 0.3% from November. In this view, the Czech Republic showed the most pronounced expansion in December, reaching 7.6%, compared with Denmark’s modest 0.4% rise. These figures highlight inflationary fluctuations between the Czech Republic and the broader Economic and Monetary Union environment, reflecting the various economic trajectories within the EU.
These figures reflect not only effective management of the inflationary crisis, but also a positive signal for consumer confidence and the country’s entire economic fabric. The Czech government’s ability to navigate through these economic challenges, significantly reducing inflation and stabilizing consumer prices, offers an optimistic outlook for 2024, promising a year of growth and stability for the Czech Republic in the European context.
Sources: https://www.czso.cz/ https://www.camic.cz/ https://vlada.gov.cz/
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