Inflation In The Czech Republic At Highest Rate Since 2008
Consumer prices increased by 0.7% in August compared to July. This increase was influenced by higher prices in almost all sections of the consumer basket. Year-on-year, consumer prices rose by 4.1% in August, the highest inflation rate since November 2008. Across the European Union, annual inflation was 2.5% in July 2021, up from 2.2% in June. Credit: Freepik
Czech Rep., Sep 12 (BD) – Year-on-year, consumer prices were up 4.1% in August, 0.7 percentage points more than in July. This steep acceleration in price growth was mainly due to higher prices in the housing sector and in the food and drink sector.
“Consumer prices rose by 0.7% in August compared to July, accelerating their year-on-year growth to 4.1%, the highest since November 2008,” said Pavla Šedivá, Head of the CZSO Consumer Price Statistics Department. “Both goods and services prices from almost all sections of the consumer basket contributed to this development. Compared to last August, the prices of goods increased by 3.6% and the prices of services by almost 5%.”
Compared to July, prices which jumped particularly quickly included package holidays (+3.3%), butter (+8.5%), and eggs (+7.5%), while decreasing prices were seen for potatoes (-5.8%) and sugar by (-5.4%). Month-on-month, prices of goods increased by 0.5% overall, and prices of services by 1.2%.
Year-on-year, however, inflation is rising at its highest rate since November 2008, driven in particular by the housing and transport sectors. In housing, prices of goods and services for routine maintenance and repairs increased by 6.7%. Rental prices for flats increased by 2.5% and prices of water and sewerage both by 5.5%, though prices fell for electricity (-3.4%) and natural gas (-4.7%). In the transport sector, prices of fuels and oils were higher by 19.0%.
Steep price rises were also recorded for food, with butter up 12.4% year-on-year, vegetables by 7.0%, and eggs by 5.8%, and prices of clothing increased 8.2% and footwear to 8.6%. The price of beer increased by 6.3% and tobacco products by 9.9%. Catering and accommodation services also contributed to the inflation rise, with prices of catering services increasing by 5.2%.
Miroslav Novák, an analyst at Akcenta, told Novinky.cz that while the contribution of the transport section to headline inflation will gradually weaken in the coming months, housing and food costs will gradually become the main drivers of inflation by the end of this year. Together, these two sections represent just under half of the consumer basket, and price changes in these areas are very sensitive for households.
Across the European Union, annual inflation was 2.5% in July 2021, up from 2.2% in June, with figures slightly lower for the Eurozone. The lowest annual inflation rates were in Malta (0.3%), Greece (0.7%), and Italy (1.0%). The highest annual rates were recorded in Estonia (4.9%), Poland, and Hungary (both 4.7%).