Consumer Price Indices - Basic Information

Commentary

Contents

The level of consumer prices rose by 0.3% in February, compared with January. Divisions ‘alcoholic beverages, tobacco‘, ‘housing, water, electricity, gas and other fuels‘, ‘recreation and culture‘ had the largest upward impacts on the consumer price level. The year-on-year growth of consumer prices was 1.5% in February (up from 1.3% in January 2007).

The month-on-month increase in the price level of 0.3% was influenced especially by an increase in the prices of tobacco products (by 3.3%) due to a higher excise duty since April 2006, which had a delayed impact. The share of tobacco products in the month-on-month increase of consumer prices was 0.1 percentage points. The moderate growth of prices of housing was brought about by a rise in prices of heat and hot water and prices of solid fuels (both by 1.0%). Like in previous years, mainly prices of package holidays went up (by 4.0%) in the division ‘recreation and culture‘. In ‘miscellaneous goods and services‘, prices of social care increased by 12% due to an amendment to the Act on Social Services. A slight rise in food prices was affected particularly by higher prices of rise (by 2.4%), potatoes (by 4.5%) and coffee (by 2.6%).

A six months’ decrease in the prices of automotive fuel (-2.6% in February) had the biggest downward effect on the level of consumer prices.

Prices of goods in total increased by 0.1% and prices of services rose by 0.5%.

In terms of year-on-year comparison, increase in consumer prices was 1.5% in February 2007, up from 1.3% in January 2007. The main reason was an accelerating growth of prices in the division ‘alcoholic beverages, tobacco‘, where the prices of tobacco products rose by 6.0% (from 3.1% in January). The year-on-year growth speeded up also in the division ‘communications‘ due to a month-on-month decrease in the prices of public telecommunication services in February 2006.

The y-o-y growth of consumer prices was most influenced by prices in the division ‘housing, water, electricity, gas and other fuels‘, where the prices of water supply increased by 6.4%, sewerage collection by 6.0%, electricity by 7.9%, and solid fuels by 16.7%. Net actual rentals rose by 8.3% in dwellings with regulated rentals and by 1.1% in dwellings with market rentals. The second biggest upward influence on the price level was prices in the division ‘food and non-alcoholic beverages‘. Higher than a year earlier were especially the prices of potatoes (by 103.1%), tomato-type and other vegetables (by 13.3% and 6.4% respectively), and bread and cereals (by 11.6%).

Conversely, the division ‘transport’, due to a fall in the prices of automotive fuel and passenger cars (-6.6% and -2.2% respectively), had a downward impact on the price level. In the division ‘furnishings, household equipment and routine maintenance of the house‘, prices of major household appliances (-4.0%) and prices of small electric household appliances (-3.4%) dropped. In the division ‘housing, water, electricity, gas and other fuels‘, prices of natural gas were down (-8.2%). Also some food prices were slightly lower than a year earlier. Prices in the division ‘clothing and footwear‘ and prices of audio-visual, photographic and information processing equipment in the division ‘recreation and culture’ decreased too.

Prices of goods in total grew by 0.4% and prices of services by 3.2%.

Inflation rate, i.e. the increase in the average consumer price index in the twelve months to February 2007 compared with the average CPI in the previous twelve months, stood at 2.3% in February, which was down by 0.1 percentage points on January 2007.

According to preliminary data of Eurostat, the year-on-year increase in the average harmonized index of consumer prices (HICP) in the 27 EU member states was 2.1% in January. The highest annual rates were observed in Hungary (8.4%) and Latvia (7.1%), and the lowest rates in the Netherlands (1.0%). Annual inflation in Slovakia slowed down to 2.2% in January (from 3.7% in December 2006). The price level in Germany rose by 1.8% (up from 1.4% in December 2006).

According to preliminary computations, the HICP in the Czech Republic in February 2007 was 0.3% month-on-month and 1.7% (up from 1.4% in January 2007) year-on-year. The MUICP (Monetary Union Index of Consumer Prices) flash estimate for February 2007 was 1.8%, as Eurostat announced.