Czech consumer price inflation likely rose in July on base effects

Consumer prices in the Czech Republic are expected to have risen slightly in the month of July. According to a Societe Generale research report, consumer prices are estimated to have risen by just one tick last month, while on a year-on-year basis, it is expected to have quickened to 0.3 percent in July.

Meanwhile, core inflation in the country is expected to have slowed to 1.3 percent; however, it is likely to accelerate in the coming months because of favorable labor market developments.  Prices of fuel and food continued to drop in last month, therefore the likely pick-up in the consumer prices is expected to be mainly because of base effects, stated Societe Generale.

Year-on-year Czech price growth is likely to further underpinned by base effects, particularly around the turn of the year, when CPI is likely to come in at 1.5 percent. Inflation in the Czech Republic is likely to reach the Czech National Bank’s target level by second half of 2017, added Societe Generale.