In the past month, the Prague Monitor has informed about a number of individual goods’ price increasing. With this trend continuing in almost all aspects of retail, it is time to offer a more complex look at the current economic situation in the Czech Republic. According to Chief Economist of the Czech Banking Association, Jakub Seidler, “Industrial producer prices accelerated in August, mainly due to rising prices of metal and wood products.” Industrial inflation reached 9.3 percent. That is 1.5 percentage points more than in July, while analysts expected a growth of only 8.6 percent. Thus, industrial and agricultural producer prices rose the fastest in August since 1993. The rise in prices manifested mainly in chemicals, metals, paper, but also grain and oilseeds. It is only a matter of time before producer inflation spills over into most consumer prices. According to the Czech Statistical Office, metals became more expensive by 27 percent compared to last year, wood by 24 percent and some subcategories even saw price increases of up to 80 percent. Chemicals are 38 percent more expensive, building materials are 16 percent more expensive. According to CNB Bank Board member Aleš Michl, inflation will not return to normal values of around two percent until the second half of 2022. “We will have higher inflation for about half a year now and I expect it to decrease in the second half of next year.”
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