Czech Core Inflation Hits 3% in July as Rents Surge 5.7%
Updated
Updated · Interior Daily · Aug 14
Czech Core Inflation Hits 3% in July as Rents Surge 5.7%
2 articles · Updated · Interior Daily · Aug 14
Summary
Core inflation in the Czech Republic rose to 3% in July, outpacing headline inflation of 1.7% and surprising analysts as underlying price pressures strengthened.
Imputed rents climbed 0.9% on the month and 5.7% on the year, while services prices rose 4.7%, pointing to an overheating housing market as the main driver.
Consumer prices increased 0.6% from June, lifted by higher fuel costs and seasonal package holiday prices, even as food prices fell again and goods prices slipped 0.2% year on year.
ING expects headline inflation to average 2% this year but core inflation around 3%, with unchanged interest rates seen as the best response given growth risks.
Over the next two years, ING sees inflation staying above target but within the Czech National Bank's 3% tolerance ceiling, with housing and future ETS2 costs posing the main upside risks.