Consumer Price Indices - Basic Information

Commentary

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The level of consumer prices rose by 0.3% in March, compared with February. Divisions ‘alcoholic beverages, tobacco‘ and ‘transport‘ had a significant upward impact on the consumer price level. The year-on-year growth of consumer prices was 1.9% in March (up from 1.5% in February 2007).


The month-on-month rise of the price level by 0.3% was influenced especially by the increase of prices of tobacco products (by 3.3%), which came from higher excise duty. In ‘transport‘, prices of automotive fuel rose by 3.3% after a six months‘ decrease. New seasonal models for clothing and footwear contributed to the price increase in the division ‘clothing and footwear‘. The rise in food prices was attributed to higher prices of fruit by 1.7%, potatoes by 2.3%, chocolate and chocolate products and confectionery without chocolate by 2.8% and some spices. In ‘miscellaneous goods and services‘, prices of financial services increased by 0.6% and prices of services of personal care by 0.7%.

Similarly as in the previous years, a contrary effect on the consumer price development had the drop in prices of package holidays by -3.0% due to the end of winter season. In food, mainly the prices of bread, yoghurts and vegetables grown for fruit went down.

Prices of goods in total increased by 0.5% and prices of services remained unchanged.

In terms of year-on-year comparison, the increase in consumer prices was 1.9%, i.e. 0.4 percentage point up in March 2007, from 1.5% in February 2007. The accelerating growth was driven by the increase of prices in the division ‘alcoholic beverages, tobacco‘, where the prices of tobacco products rose by 9.6% (from 6.0% in February). The year-on-year slightly accelerated growth was recorded also in the divisions ‘food and non-alcoholic beverages‘, ‘recreation and culture‘ and ‘miscellaneous goods and services‘. The decreasing effect in ‘transport‘ on inflation in total was reduced due to a slowdown of y-o-y drop in prices to 3.1% in March (from 6.6% in February).

The y-o-y growth of consumer prices was most influenced by prices in the division ‘housing, water, electricity, gas and other fuels‘. The prices of water supply increased by 6.4%, sewerage collection by 6.0%, electricity by 7.9%, and solid fuels by 15.4%. Net actual rentals rose by 8.3% in dwellings with regulated rentals and by 1.0% in dwellings with market rentals. The second biggest upward influence on the price level was attributed to prices in the division ‘food and non-alcoholic beverages‘. Higher than a year earlier were especially the prices of potatoes (by 72.7%), bread and cereals (by 11.6%) and fish (by 3.5%).

Conversely, the divisions ‘transport’ and ‘clothing and footwear’, had a downward impact on the price level (although less markedly than in February). In the division ‘housing, water, electricity, gas and other fuels‘, prices of natural gas were down (-8.2%). Also prices of meat, oils, and fats, coffee, tea and cocoa were slightly lower than a year earlier. Prices of audio-visual, photographic and information processing equipment in the division ‘recreation and culture’ decreased too.

Prices of goods in total grew by 1.0% and prices of services by 3.4%.

Inflation rate, i.e. the increase in the average consumer price index in the twelve months to March 2007 compared with the average CPI in the previous twelve months, stood at 2.2% in March, which was down by 0.1 percentage point on February 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 February (the same as in January). The highest annual rates were observed in Hungary (9.0%) and Latvia (7.2%), and the lowest rates in Malta (0.8%) and in Finland and France (both 1.2%). The growth of consumer prices in Slovakia slowed down to 2.0% in February (from 2.2% in January 2007). The price level in Germany rose by 1.9% (up from 1.8% in January 2007).

According to preliminary calculations, the HICP in the Czech Republic in March 2007 was 0.3% month-on-month and 2.1% (up from 1.7% in February 2007) year-on-year. The MUICP (Monetary Union Index of Consumer Prices) flash estimate for March 2007 was 1.9% y-o-y, as Eurostat announced.