Consumer price indices - inflation - July 2008

The consumer price level in July increased compared with June by 0.5%. An upward effect on the consumer price level, month-on-month, came mainly from the price rise in 'housing, water, electricity, gas and other fuels' and 'recreation and culture'. The year-on-year consumer price growth accelerated to 6.9% in July (from 6.7% in June).
The month-on-month consumer price level increase by 0.5% owed mainly to a price rise in natural gas by 9.7%. Net actual rentals paid by tenants for rented dwellings rose by 0.8% and solid fuel prices by 1.1%. In 'recreation and culture', seasonal prices of package holidays increased by 13.1%, of which prices of domestic holidays by 5.5% and holidays abroad by 15.1%. A 2.1% price rise in tobacco products responded to an excise tax increase though with a half year delay. Prices of medicaments without prescription were 2.3% up.

A downward effect on the consumer price level came from the price decrease in clothing by 1.5% and footwear by 2.7% due to summer sales of goods. The fall in food prices came from lower prices of potatoes by 24.4%, vegetables grown for fruit by 5.8% and other vegetables by 6.6%. A moderate drop in prices (by 0.6%) was recorded for automotive fuel after four months. Further decrease was observed in prices of transport vehicles by 0.5%, mobile phones by 2.3% and audio-visual and photographic equipment and data-processing equipment by 1.3%.

Prices of goods in total increased by 0.2%, while prices of services rose by 1.1%.

In terms of the year-on-year comparison, in July, the increase in consumer prices was 6.9%, i.e. 0.2 percentage point up on June. An accelerated price growth was recorded primarily in 'housing, water, electricity, gas and other fuels' due to the increase in natural gas by 27.7% (from 18.4% in June). Net actual rentals rose by 16.2%, of which for dwellings with regulated rentals by 25.0%, while for dwellings with market rentals by 2.9%. Prices of tobacco products increased by 12.3% (12.2% in June). A decelerated price growth was recorded mainly in 'transport', where prices of automotive fuel were by 8.3% up (9.8% in June). Prices of oil increased by 21.9% (from 23.9% in June). In 'recreation and culture', a usual seasonal increase in prices of package holidays was recorded month-on-month, but this increase slowed down to 0.8% year-on-year (from 1.8% in June).

The biggest effect on the price level, which was even stronger in July, came from 'housing, water, electricity, gas and other fuels'. The second biggest upward influence on the price level came again from prices in the division 'food and non-alcoholic beverages', where prices of bread and cereals went up by 21.4%, of which prices of flour by 50.5%, rice by 50.0%, rolls and baguettes by 25.4% and bread by 22.4%. Prices of edible oils and vegetable fats were higher (by 30.1% and 28.3%, respectively).

Compared with 2007, prices of clothing were lower by 1.6%, devices and household appliances by 1.6%, transport vehicles by 4.4%, audio-visual and photographic equipment and data-processing equipment by 11.1%, recording media by 3.4% and sports equipment by 4.9%. In food, prices of potatoes were lower by 13.9%, stone fruit and berry plants by 10.5%, vegetables grown for fruit by 4.6% and sugar by 3.7%. In 'communications', prices of mobile phones decreased and so did prices of telephone and telefax services due to commercial discounts provided by mobile operators.

Prices of goods in total grew by 6.2% and prices of services by 8.0%.

Inflation rate, i.e. the increase in the average consumer price index in the twelve months to July 2008 compared with the average CPI in the previous twelve months, stood at 5.8% in July (0.4 percentage point up compared with June 2008).

According to preliminary data of Eurostat, the year-on-year increase in the average harmonized index of consumer prices (HICP) in the EU 27 member states was 4.3% in June (0.3 p.p. up on May). The highest annual rates were observed in Latvia (17.5%) and Bulgaria (14.7%), and the lowest rate in the Netherlands (2.3%). The growth of consumer prices in Slovakia accelerated to 4.3% in June (from 4.0% in May). In Germany, the price growth of consumer prices accelerated to 3.4% (from 3.1% in May).

According to preliminary calculations, the HICP in the Czech Republic in July 2008 increased by 0.5%, month-on-month, and accelerated to 6.8% (from 6.6% in June), year-on-year. The MUICP (Monetary Union Index of Consumer Prices) flash estimate for the Eurozone in July 2008 was 4.1%, y-o-y, as Eurostat announced (more information on Eurostat's web pages: HICP) .

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Note
Contact: Pavla Sediva, phone (+420) 274052138, e-mail: pavla.sediva@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: 7101-08 Consumer Price Indices – Basic Information
7103-08 Consumer Price Indices – Detailed Information
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