Consumer Price Indices - Basic Information
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Slowdown of year-on-year inflation
Consumer price indices - May 2005
The month-on-month increase in the price level (+0.2%) was influenced most by an increase in prices in ‘food and non-alcoholic beverages’, which rose rather noticeably after decreasing for two months (with the exception of December 2004 the highest m-o-m increase for the last 16 months). Prices of fresh vegetables and fruit were higher in particular (by +12.3% and +5.0%, respectively). The majority of other kinds of food had rather a slightly downward trend. The rise in prices in ‘recreation and culture’ was affected primarily by higher prices of package holidays (by +1.8%) due to the start of the summer season. Similarly, in ‘health’, seasonal prices of stays at spas increased by +10.9% in particular. In ‘transport’, prices of automotive fuel increased by +0.7% in May after a marked rise in prices in April.
In total, prices of goods rose by +0.1% and services by +0.2%.
In terms of year-on-year comparison, consumer prices growth slowed down to +1.3% in May (from +1.6% in April), which is the lowest y-o-y rise in prices since December 2003. The slowdown was mainly due to the dependence on VAT rate in services, which was increased from 5 to 19 percent as from May 2004. It related primarily to public catering, in which the growth of meal prices slowed down to +2.6% in May 2005 from +7.5% in April and in canteens to +5.7% (from +12.3% in April). Similarly, the increase in prices of services of personal care slowed down to +3.3% from +9.7% in April. In ‘alcoholic beverages, tobacco’ the growth of prices of tobacco products decreased to +3.3% from +7.7% in April due to the elimination of an influence of the higher excise duty introduced in 2004.
On the other hand, the reduction of VAT rate (from 22 to 19%) as from May 2004 was reflected in natural gas by acceleration of the year-on-year growth by +10.0% in May 2005 from +7.2% in April and in electricity by +4.9% from +2.3% in April. The rise in the overall level of consumer prices was influenced by the development of prices in ‘food and non-alcoholic beverages’, in which prices increased moderately in May after the y-o-y drop that lasted for 4 months. Prices of fruit were higher by +9.6%, meat by +2.4% (of which particularly prices of beef by +6.5%), oils and fats by +1.3%, sugar by +23.4%. The drop in prices of fresh vegetables slowed down from -15.8% in April to –3.1% in May. Prices of potatoes were particularly lower by –57.0%, bread and cereals by –2.7%, eggs by –19.9%, non-alcoholic beverages by –1.8%.
The highest increase was recorded for prices in ‘health’ due to higher prices of drugs by +10.1% in particular (the influence of an increase of supplementary payments for medicaments prescribed by doctor). Prices of financial services went up by +9.4%.
In total, prices of goods went up by +0.3% y-o-y and prices of services were higher by +3.0%.
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 May.
According to preliminary data of Eurostat, the year-on-year increase in the average harmonized index of consumer prices (HICP) in the EU25 reached +2.1% in April 2005 (the same as in March and February). The highest y-o-y price growth was observed in Latvia (+7.1%) and the lowest in Sweden (+0.4%). In Slovakia, the rise in prices accelerated to +2.5% in April (from +2.3% in March). In Germany, prices rose by +1.4% in April (by +1.7% in March). In the Czech Republic, the y-o-y HICP growth reached +0.9% in May 2005 (+1.4% in April 2005). According to a flash estimate published by Eurostat, the y-o-y HICP increase for the Euro-zone was +2.0% in May 2005.
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 )