Czech consumer prices increased by 2% year on year and by 0.3% month on month in February as food prices eased.

It is the lowest inflation rate since December 2018 and was down by 0.3 percentage points from January, when inflation collapsed.  

It is also just on the Czech National Bank (CNB) target level, which most forecasts did not expect to be reached in 2024. The CNB’s prognosis expects an average annual inflation of 2.6% this year.  

“Development of consumer prices in February was significantly influenced by prices of fuels,” which “returned to growth after several months of decline”, commented Pavla Sediva, head of the Consumer Price Statistics Unit at the Czech Statistical Office (CZSO).

“On average, diesel was sold at gas stations for around CZK38.10 (€1.51) per litre in February, and petrol Natural 95 for almost CZK37.80 per litre,” Sediva pointed out.

In the food and non-alcoholic beverages sector, the prices declined by 0.1% y/y in February, a significant change from the 13.3% y/y increase in January. In the impactful sector of housing, water, electricity, gas and other fuels, prices of actual rentals rose by 6.8%, prices of materials and services for maintenance and repair of dwellings went up by 4.8%, water supply by 10.9%, sewage collection by 10.5%, electricity by 13.1%, and heat and hot water supply by 3.5%. Prices of natural gas dropped by 5.5% and solid fuels by 3.7%.

In m/m terms, prices of fuels and lubricants for personal transport equipment increased by 4.3%. In the food sector, the prices of potatoes were up 10.8%, eggs 7.1% and cheese and curd 1.5%. Decreases in wine prices of 3.7% and spirit prices of 2.8% were also registered, while poultry prices shrank by 3.1%, butter by 6.1% and semi-skimmed milk by 4.1%.  

Analysts warn that inflationary pressures remain despite the positive figures.

“Overall inflation has returned to a low level. However, the core inflation remains to be moderately high. Prices in the area of services […] should be monitored more closely,” David Marek, Deloitte’s head economist and advisor to the country’s president, Petr Pavel, was quoted as saying by Czech Television.