Consumer Price Indices - Detailed Information

Commentary

Contents

The level of consumer prices in April rose compared with March by 0.7%. Divisions ‘food and non-alcoholic beverages‘, ‘alcoholic beverages, tobacco‘, ‘clothing and footwear‘, ‘housing, water, electricity, gas and other fuels‘, ‘health‘ and ‘transport‘ had an upward effect on the consumer price level. The year-on-year growth of consumer prices was 2.5% in April (up from 1.9% in March 2007).

The month-on-month rise of the price level by 0.7% was the biggest increase since October 2005 (with the exception of January 2007 and January 2006). This development was influenced especially by the increase of food prices due to higher prices of vegetables and fruit (by 12.9% and 1.1%, respectively). Prices of some bakery and dairy products rose as well. In ‘transport‘, prices of automotive fuel went up by 4.3%. An increase in prices of tobacco products continued for the forth month due to the rise in excise duty and reached 2.1% in April. In the division ‘housing, water, electricity, gas and other fuels‘, prices of natural gas rose by 1.4%, heat by 0.6% and net rentals paid for dwellings with regulated rentals by 0.9%. In ‘clothing and footwear‘, the price growth was influenced by higher prices of new summer goods. In ‘health‘, amounts paid by patients for drugs (with a prescription) increased by 12.3%.

Similarly as in the previous years, a contrary effect on the consumer price development showed the drop in prices of package holidays by 1.0% (between two seasons).

Prices of goods in total increased by 1.1% and prices of services by 0.2%.

In terms of year-on-year comparison, in April the increase in consumer prices was 2.5 %, i.e. 0.6 percentage points up compared to March 2007. It is the biggest y-o-y increase for the last seven months. This leap in prices was influenced primarily by the acceleration in a growth of prices in ‘food and non-alcoholic beverages‘, in which seasonal prices of vegetables incl. potatoes were higher by 24.8% and prices of bread and cereals by 11.9%. A rise in prices in ‘alcoholic beverages, tobacco‘ accelerated due to the increase in prices of tobacco products by 11.7% (from 9.6% in March). The acceleration of y-o-y growth was recorded also in the division ‘health‘ due to the increased amounts paid by patients for drugs by 19.1%.

Prices in ‘food and non-alcoholic beverages‘ become a group showing the strongest impact on the y-o-y growth of prices in April, while the division ‘housing, water, electricity, gas and other fuels‘, which most influenced inflation in the long term, moved to the second place. In housing, prices of electricity and solid fuels rose (7.9% and 16.9%, respectively). Water supply went up by 6.7% and sewerage collection by 5.5%. Net rentals paid for dwellings with regulated rentals increased by 9.3% and by 1.1% for dwellings with market rentals.

Conversely, the division ‘transport’ had a downward effect on the price level due to the drop of prices for automotive fuel by 3.5%, in particular. Prices of passenger cars dropped by 2.2%. Prices of clothing and footwear were moderately lower than in the previous year. In the division ‘housing, water, electricity, gas and other fuels‘, prices of natural gas went down by 8.2%. Also prices of meat, oils, and fats, coffee, tea and cocoa were slightly lower than a year earlier. Prices of electronic audio-visual, photographic and cinematographic equipment and personal computers in the division ‘recreation and culture’ decreased too.

Prices of goods in total grew by 1.9% and prices of services by 3.6%.

Inflation rate, i.e. the increase in the average consumer price index in the twelve months to April 2007 compared with the average CPI in the previous twelve months, stood at 2.2% in April (the same as in March 2007).

According to preliminary data of Eurostat, the year-on-year increase in the average harmonized index of consumer prices (HICP) in 27 EU member states was 2.3% in March (0.1% percentage point up on February). The highest annual rates were observed in Hungary (9.0%) and Latvia (8.5%), and the lowest rates in Malta (0.5%) and in France (1.2%). The growth of consumer prices in Slovakia accelerated to 2.1% in March (from 2.0% in February 2007). The price level in Germany rose by 2.0% (1.9% in February 2007).

According to preliminary calculations, the HICP in the Czech Republic in April 2007 increased by 0.7% month-on-month and accelerated to 2.7% (from 2.1% in March 2007) year-on-year. The MUICP (Monetary Union Index of Consumer Prices) flash estimate for April 2007 was 1.8% y-o-y, as Eurostat announced.

In April 2007, in comparison to April 2007, consumer prices grew by 0.9% in households of pensioners and by 0.7% in households of employees. Both types of households recorded a higher consumer price index for ‘health‘: households of pensioners by 6.0% and households of employees by 2.4%. The increase was affected particularly by higher prices of drugs with a prescription. Higher index was registered for ‘food and non-alcoholic beverages‘ (1.5% for pensioners and 1.5% for employees, too) mainly due to growth of prices of vegetables and also rolls and baguettes and wheat flour. On the other hand, a lower index was recorded for ‘recreation and culture‘ (-0.5% for pensioners, -0.5% for employees as well) primarily due to lower prices of domestic recreational stays, recreational stays abroad and flowers and flower products. The consumer price index for ‘education‘ was down (-0.2% for pensioners and –0.1% for employees), as a result of lower prices of education not definable by level.

In the capital city of Prague, the overall consumer price index (cost of living) grew by 0.7% month-on-month (0.7% in the whole Czech Republic, too). The consumer price index for ‘health‘ increased by 2.4% (2.8% in the Czech Republic) mainly due to higher prices of drugs with a prescription. Prague registered a higher index for ‘food and non-alcoholic beverages‘ by 2.0% (1.6% in the Czech Republic) particularly due to price increases in vegetables and also rolls and baguettes and wheat flour. The consumer price index for ‘clothing and footwear’ grew by 1.6% (1.2% in the Czech Republic), affected by higher prices of underwear and knitted wear and also footwear. On the other hand, a drop occurred in ‘recreation and culture‘ by -0.5% (-0.5% in the Czech Republic as well) as a result of lower prices of domestic recreational stays, information processing equipment and flowers and flower products. The consumer price index for ‘communications‘ decreased by -0.1% (by -0.2% was recorded for the whole Czech Republic), which was affected by lower prices of telecommunication services and mobile phones.