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Czech inflation accelerated at the end of 2021 but the focus of investors has already shifted to the start of this year when the central bank expects consumer prices to rise at the faster pace in over two decades.
The annual inflation rate rose to 6.6% in December, from 6% in the previous month, data from Czech Statistics Office showed Wednesday. The central bank said its latest “working estimate” sees January inflation at around 9% and that it can't completely rule out double-digit figures for several months in early 2022.
The bank has pledged to continue with one of the European Union's most aggressive campaigns of interest-rate increases, after lifting borrowing costs by a cumulative 3.5 percentage points since June.
- “The published data reflect strong and across-the-board inflation pressures from the domestic and foreign economies, which are higher than expected by the autumn forecast,” the central bank said.
- Overall price growth exceeded the central bank's forecast mainly due to core inflation; that measure reflects strong demand pressures as well as rising property prices and accelerated to a record 8.6% in December, the bank said in a statement.
- While commodity prices and supply-chain problems are among key price drivers, the central bank says its monetary-policy tightening is aimed at preventing current high inflation from becoming a long-term phenomenon.
- The Czech Republic has the lowest jobless rate in the EU and policy makers want to prevent a wage-price spiral.
Read more:
- Czech Rate Setters Saw Longer Inflation Pressures, Minutes Show
- Czechs Hoard Inflation Bonds as Fear of Runaway Prices Grows
- Czechs Say Rate Hikes Aren't Over After Another Surprise Move
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