December brought a decline in the CPI in the Czech Republic compared to November. The reading turned out to be much lower than forecasts.
CPI inflation in the Czech Republic in December 2022 amounted to 15.8% y/y, and the forecast assumed 16.4%, in November it was 16.2%. In m/m terms, the index reached 0%, while the forecast was 0.5%, and in November it amounted to 1.2%.
As Bartosz Sawicki from Cinkciarz.pl pointed out, Poland will not be the only country in the CEE3 region with a decrease in inflation in December 2022.
Inflation in the Czech Republic
Source : Trading Economics
Czech CPI like a roller-coaster
Let us remind you that in November 2022 inflation on the Vltava River was 16.2%, while in October it was 15.1%. The reading was a negative surprise as analysts' consensus assumed 15.8%. The local inflation peak was recorded in the Czech Republic in September at 18%.
The behavior of the CPI index in the Czech Republic was explained by PKO Research economists . “In the last two months, inflation was fueled by energy prices. In October it fell due to government subsidies, and in November it increased due to base effects related to the 2021 VAT cut.
The Czech National Bank started to raise interest rates quite early, significantly ahead of the National Bank of Poland, but earlier it also decided to suspend the cycle of increases. Currently, the main rate in the Czech Republic is at the level of 7%.
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The main rate in the Czech Republic
Source: Trading Economics
