Consumer Price Indices - Basic Information

Commentary

Natural gas and fuel pushed inflation up
Consumer price indices - October 2004

The month-on-month increase in consumer prices (+0.5%) was influenced mainly by the rise in prices in ‘housing, water, electricity, gas and other fuels’, which affected the price level by +0.4 percentage points, further in prices in ‘transport’ and ‘clothing and footwear’. The drop in prices in ‘recreation and culture’ had primarily a decreasing influence by 0.5%.
The growth of housing was affected particularly by higher prices of natural gas (+11.0%). In transport, prices of automotive fuel went up by 2.6%, which is the highest month-on-month rise in prices for last five months. In ‘clothing and footwear’ especially prices of winter cloth and footwear were higher. In ‘restaurants and hotels’, prices of canteens in schools, canteens, canteens and accommodation services of boarding schools and universities rose, too (+0.9%, +0.6% and +6.9%, respectively). The increase in prices was recorded for public telecommunication services due to the end of a temporary decrease of a fee for installation of residential telephone lines.
In ‘food and non-alcoholic beverages’ prices stopped their decreasing after three months. Higher were mainly prices of meat (+0.8%), of which prices of pork increased by 2.2% after a slight drop in September. The rise was recorded also for prices of smoked goods, milk, cheese, oils and fats. Prices of fresh vegetables increased by 0.8% after the drop that lasted for seven months. On the other hand, the drop in prices continued (although with a slower pace than in previous month) in fruit (-3.8%) and potatoes (-6.4%). Prices of flour, rice, poultry and eggs dropped moderately and after a five month rise prices of sugar decreased as well.
The seasonal drop in prices was recorded for therapeutic stays at spas and domestic recreational stays (both –7.4%).
In total, prices of goods and services increased (+0.7% and +0.2%, respectively).
In terms of year-on-year comparison, consumer prices grew by 3.5%, which was by 0.5 percentage points up on September and the highest y-o-y increase in prices since March 2002. This development was influenced by the increase in y-o-y growth rate in prices in ‘housing, water, electricity, gas and other fuels’, in which prices of natural gas went up by 7.7% in October, whereas they were lower y-o-y by 5.8% in September. The acceleration of price growth was recorded also in ‘transport’ due to higher prices of automotive fuel by 14.3% (+10.4% in September), which is the highest y-o-y growth of prices of automotive fuel since November 2000. In communication’ the high rise in prices continued, as a consequence of a change of the VAT rate for public telecommunication services, which was increased by the end of the discounted fee for installation of residential telephone lines in October.
On the other hand, in ‘food and non-alcoholic beverages’ further slowdown in y-o-y rise in prices was observed, which was related to most kinds of food. Prices of bread and cereals were higher by 13.3% (by 13.8% in September), meat by 1.6% (+2.4% in September), milk cheese and eggs by 2.4% in average (+3.1% in September), oils and fats by 3.6% (+4.2% in September), sugar by 40.8% (+47.8% in September). In fresh vegetables the y-o-y drop became deeper and amounted to -16.2% (from -13.1% in September), in potatoes -42.3% (from -33.9%). The slowing down of growth of prices in ‘education’ was caused by the lower month-on-month increase in prices primarily in higher than secondary education. Similarly, in ‘miscellaneous goods and services’ the rise in prices of financial services slowed down to 7.3% (from 14.2% in September) due to different m-o-m development in October 2003 and October 2004.
The highest rise (except ‘communication’) was recorded again for ‘restaurants and hotels’, in which prices in public catering increased by 8.2%, in canteens by 11.6% and in canteens in schools by 6.1%. Again, lower were also prices of clothing and footwear, household appliances, detergents, bicycles, mobile phones, equipment for the reception, recording and reproduction of sound and pictures.
In total, prices of goods went up by 1.7% and prices of services by 6.2%.
Inflation rate, i.e. an increase in the average consumer price index for last 12 months related to the average CPI for the preceding 12 months, amounted to 2.5% in October.
According to preliminary data of Eurostat, the year-on-year increase in the average harmonized index of consumer prices (HICP) in the EU25 in September 2004 reached 2.1% (0.2 percentage points down on August). The slowdown of the rise was recorded for most of the EU Member States. The highest growth of prices was observed in Latvia (+7.7%), the lowest in Finland (+0.2%). In the Czech Republic, the y-o-y HICP growth reached +3.1% in October (in September +2.8%). According to a flash estimate published by Eurostat, the y-o-y HICP increase for the Euro-zone in October 2004 was 2.5%.

Note
Contact: Marie Huskova, phone (+420) 274054104, e-mail: huskova@gw.czso.cz
Data source: CZSO survey
End of data collection: 20th day of the reference month
End of data processing: 3rd day of the month that follows each reference month
The data are final.
Related publications: 7101-04 Consumer Price Indices – Basic Information; 7103-04 Consumer Price Indices – Detailed Information (Internet: https://csu.gov.cz )