Year-on-year inflation jumped over six percent in November to about 6.6 percent, according to analysts. This corresponds to an average inflation rate of 3.8 percent for the whole of last year. It is the highest since 2008.
According to analysts contacted by ČTK, the driving force of growth at the end of the year was food and housing prices. However, according to economists, growth was noticeable across almost the entire consumer basket. The Czech Statistical Office will publish data on inflation on Wednesday 12 January.
“After only a slight increase in November, dampened by the waiver of VAT on energy, year-on-year inflation has apparently returned to a steeply rising trajectory. The increase in inflation in December was most likely driven by food prices, which have so far lagged behind their growth in most other items in the consumer basket. The cost of owner-occupied housing and, after the November break, probably also contributed significantly to the increase in year-on-year inflation electricity and gas prices, ”Said UniCredit Bank analyst Patrik Rožumberský. He expects December inflation of 6.9 percent.
Overall, according to Akcenta analyst Miroslav Novák, all sections of the consumer basket contributed to inflation in December year-on-year, with a few exceptions. “The transport section contributed the most to the year-on-year growth in inflation, mainly due to the year-on-year significant increase higher fuel prices. Year-on-year, prices are higher in the housing, water, energy and fuels section, mainly due to imputed rents. However, the impact of this section on headline inflation was temporarily distorted by a zero VAT rate on electricity and gas in November and December. At the end of last year, there was also a rapid rise in food prices, “he said.
>>>>>> Read all about inflation here
Price highs did not hit until the second half of the year
According to him, in total for the whole of 2021, consumer inflation rose by 3.8 percent, mainly due to relatively lower price growth in the first half of the year. According to him, it is necessary to expect a really extreme year-on-year growth in consumer inflation at the beginning of this year, by as much as nine percent. For December, Novák expects year-on-year inflation of 6.8 percent.
According to Jiří Polanský, an analyst at Česká spořitelna Inflation will peak in the first quarter, with further increases in energy prices and, to a lesser extent, food prices. “Moreover, for January, the risk is skewed even more significantly, so a value of over nine percent cannot be ruled out. From the second quarter onwards, inflation will gradually slow down, ”he estimated. He expects inflation of 6.3 percent in December.
How to save on inflation? Don’t shop. This is a new trend in social networking
The minimalist approach to ownership and spending has been on the verge of several years. Influencers are now coming up with a new trend: buying little or nothing.
It simply makes everything more expensive
The chief economist of the Czech Banking Association, Jakub Seidler, pointed out that December inflation will be still affected by the VAT remission of gas and electricity, which will deduct around 1.5 percentage points from year-on-year inflation. “Without this effect, November inflation alone would not be six percent, but around 7.5 percent, and December inflation, after adjusting for this effect, would be close to eight percent,” he said. Seidler estimates inflation at 6.3 percent in December.
“Price pressures should remain broadly broad in December. We expect goods and services to rise in price, ”said Raiffeisenbank analyst David Vagenknecht, who estimated inflation at 6.6 percent in December.
“We expect a month-on-month increase of 0.4 percent from the overall consumer price index in December and an acceleration of the year-on-year inflation rate to 6.6 percent,” said Michal Brožka, an economist at Komerční banka.
According to him, full VAT payments for energy will be returned at the beginning of this year, and traders in a number of areas will pass on rising costs to consumer prices. According to him, inflation will thus exceed seven percent in January and may be close to eight percent in the first quarter. “Inflation data should thus strengthen the financial market in anticipation of further increases in CNB interest rates. We expect the key interest rate to increase by another 0.75 percentage point to 4.50 percent in February, ”he added.
Czechs are increasingly addressing the price of food
Inflation and coronavirus are forcing more Czechs to look at the food price tag, according to a KPMG survey. Most people don’t spend more than four thousand a month on food.
– .
