Breathtaking inflation. Find out what makes your current expenses more expensive

“The growth of domestic consumer prices is not slowing down, on the contrary. Although cautious hopes were already placed in April that the rate of inflation could begin to show at least signs of a slowdown, the opposite turned out to be true,” says Cyrrus analyst. Vít Hradil.

Not only has year-on-year inflation risen again above expectations, month-on-month statistics are even more crucial for economists. After 1.7 percent from the previous month, it added further, this time reaching 1.8 percent.

At the same time, the sharp rise in inflation is still largely due to the same items – housing and energy, transport and food.

To give you an idea, electricity prices rose by 30.1 percent, natural gas by 44.2 percent, solid fuels by 24.1 percent and heat and hot water by 17.5 percent year-on-year in terms of housing prices. In all cases, growth was higher than in March. Rents rose 4.5 percent in April, rents 5.3 percent and sewerage rose 6.4 percent.

April’s year-on-year growth in food was also faster than in March. For example, wheat flour rose by 65 percent year-on-year in April, meat by 11 percent, semi-skimmed long-life milk by almost a third, eggs by more than 14 percent and sugar by more than a quarter. Bread was thus more than 20 percent more expensive than last year, the price of butter rose by 31.6 percent and potatoes by 19.2 percent.

Cars rose by almost 14 percent year on year and fuels and oils by 41.5 percent. “The prices of clothing increased by 21.4 percent and footwear by 15.2 percent,” the CZSO said. However, the growth of prices of catering services also accelerated, for example, by 19.5 percent year-on-year. Meals and accommodation prices rose by four percent month-on-month.

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The new numbers are the cold shower

“The April data represent another, rather regular cold shower for all those who believed in an early calm. Strong year-on-year price increases could not be a big surprise, the Czechia had to get used to them,” notes Hradil.

“The worse news is the continuing strong month-on-month dynamics as well as the fact that inflation continues to spread beyond categories that are directly affected by the situation in global markets. Typical examples are catering and accommodation, clothing and footwear and home furnishings,” the analyst warns.

“Inflation thus permeates the entire consumer basket. Unfortunately, it did not say the last word,” agrees Patria Finance economist Jan Bureš. “Inflation is likely to continue to rise in the coming months due to the continuing rise in energy and food prices. At the moment, we see its peak in June, above 15 percent,” he estimates.

According to him, inflation will only subside very slowly and will remain in double digits for the rest of the year. “However, there is a growing risk that the return to the target will be slower in 2023 and 2024 as companies’ inflation expectations have skyrocketed. For many, it is becoming a new norm to pass on input costs automatically to their final customers. This may keep inflation longer. at higher levels, “he points out.

According to BH Securities economist Štepán Křeček, the living standards of Czechs are gradually declining. “People should focus on cutting off all unnecessary expenses. Alternatively, they can find more jobs to increase their income. There is still a large surplus of vacancies in the labor market, which can help solve financial problems in family budgets,” the economist added.

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He also adds that the domestic economy is heading for the so-called stagflation, which economists and bankers are talking about more and more due to the sharp rise in prices. It is a combination of the words stagnation and inflation. It is a combination of high inflation, very modest or zero economic growth and high unemployment.

However, the Czechia does not currently meet the third condition that meets the economic deadline for stagflation, ie rising unemployment. April data from Czech statisticians clearly showed that the problem of the labor market now is not the number of unemployed people, but the shortage of workers just mentioned. However, the effects of the war in Ukraine and inflation will be seen in the labor market.

Are you interested in the price of a specific item? You can find out its development within the consumer basket yourself. Just choose from the following overview:

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