Consumer price indices - inflation - July 2006

The consumer price level rose by 0.4% month-on-month in June. Similarly as in the preceding years, the month-on-month growth was influenced by a seasonal increase in prices of domestic recreational stays and recreational stays abroad. In terms of year-on-year comparison, the growth of consumer prices accelerated to 2.9% in July from 2.8% in June.
The month-on-month rise in the price level was brought about mainly by an increase in prices in ‘recreation and culture’, in which, like in the previous years, seasonal prices of package holidays rose by 17.2%, of which domestic stays by 6.8% and recreational stays abroad by 22.0%. In ‘transport’, prices of automotive fuel increased by 1.6%. In ‘transport’, the growth of prices was also brought about by the introduction of the 700 CZK charge for a skilled aptitude test for car driving. In ‘communications’, the growth of prices was due to discounted prices for installation of a residential telephone line (since February till April 2006), which came to an end. In alcoholic beverages, prices of wine went up by 0.6%. In ‘miscellaneous goods and services’, prices of cosmetics in particular rose by 1.5%.

A reducing effect had the fall in prices in ‘clothing and footwear‘, in which prices of both cloth and footwear dropped by -2.5% due to mainly lower prices of a summer assortment. The drop was recorded also for ‘food and non-alcoholic beverages’, which was brought about primarily by lower prices of potatoes, fruit and fresh vegetables (by -30.5%, -4.3% and -2.0%, respectively). Prices of chocolate and chocolate products, coffee, tea and some other food were also lower (due to a shift in the lower VAT rate 5% since 15 July 2006). On the other hand, prices of some kinds of food went up. The growth of prices of bread and cereals, which started in June, continued in July (+3.6%), of which bread by 5.5% and rolls and baguettes by 6.7%. Prices of pork were higher by 2.2%, milk by 1.2% and sugar by 1.9%.

In total, prices of goods dropped by -0.1% and prices of services rose by 1.4%.

In terms of year-on-year comparison, consumer prices amounted to 2.9% in July (0.1 percentage points up on June). An acceleration of the price growth rate was recorded particularly for ‘food and non-alcoholic beverages’, which rose by 2.4% in July (from 0.9% in June). The main reason for this development was the increase in prices of bread and cereals by 12.2% (from 7.4% in June). Prices of bread were higher by 18.0% and prices of rolls and baguettes by 25.4%. Prices of potatoes and further prices of fresh vegetables and fruit had a higher year-on-year rise in July than in June as well. Prices of potatoes went up by 55.8% (in June by 41.7%) in spite of the marked m-o-m drop (which was lower than in the previous year).

The year-on-year growth of prices slowed down in ‘transport’ particularly due to prices of automotive fuel, which was higher by 5.7% in July (by 8.3% in June). In housing, a slight slowdown was recorded for the price growth due to prices of natural gas, in which the increase was reduced to 24.6% in July (from 30.0% in June).

The decisive influence (2.0 percentage points) on y-o-y rise in consumer prices belonged again to price changes in ‘housing, water, electricity, gas and other fuels’. The second biggest effect had the price development in ‘food and non-alcoholic beverages’ (0.5 percentage points).

A reduction in the price level was affected primarily by the drop in prices in ‘clothing and footwear‘ and in ‘furnishings, household equipment and routine maintenance of the house‘, like in the previous months. Prices of recreational stays abroad were y-o-y by -1.9% lower in average in spite of their marked m-o-m increase.

In total, prices of goods went up (2.8%) as well as prices of services (3.3%).

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 stood at 2.6% in July, i.e. by 0.1 percentage point up on June 2006.

According to preliminary data of Eurostat, the year-on-year increase in the average harmonized index of consumer prices (HICP) in the EU25 was 2.4% in June (the same as in May). Prices grew mostly in Latvia (6.3%), the least in Poland and Finland (both 1.5%). Growth of prices in Slovakia slowed down to 4.5% in June (from 4.8% in May). In Germany, the rise in prices slowed down to 2.0% (from 2.1% in May).

In the Czech Republic, the m-o-m increase was 0.4% in July and the y-o-y HICP growth speeded up to 2.4% (from 2.3% in June). According to the flash estimate published by Eurostat, the y-o-y HICP increase for the Euro-zone was 2.5% in July 2006.

---

Note
Contact: Marie Huskova, phone (+420) 274054104, e-mail: marie.huskova@csu.gov.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 the reference month
Related publications: 7101-05 Consumer Price Indices – Basic Information
7103-05 Consumer Price Indices – Detailed Information
( http://www.czso.cz/eng/csu.nsf/archivri?openform )
( /katalog-produktu )