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Inflation in the Czech Republic Slowed to 8.8 Percent in July

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Year-on-year inflation eased, with consumer prices up 8.8% in July and 9.7% in June, according to the Czech Statistical Office (CZSO). Monthly, prices rose 0.5%. The slower growth was attributed to reduced food and energy costs, likely leading to a gradual decline in inflation over the coming months.

Despite this, the Czech Republic ranked ninth in European inflation rates, as per analysis by Portu. Hungary led, followed by Serbia, Ukraine, and Slovakia. In the euro area, headline inflation decreased by 0.2%, resulting in a 5.3% inflation rate for July.

Food prices significantly contributed to the slowdown, with annual growth dropping from 9.5% to 8.8% in July. Among food items, meat, vegetable fats, and sugar experienced milder price increases. Housing prices saw lower year-on-year hikes for gas, fuel, and other utilities.

Additionally, there were notable price increases for eggs, vegetables, and potatoes. Package holidays, catering, and accommodations also became pricier. Conversely, transport costs decreased by 23.9% year-on-year, largely due to fuel and oil prices.

Analysts believed the moderation in food and energy prices drove the July inflation decline, predicting a slower decline ahead, averaging around 11% for the year. Despite this, economists noted positive trends in retail sales and overall consumer spending.

The Czech National Bank’s forecast was slightly exceeded, with July’s year-on-year inflation lower by 0.1 percentage point. The central bank expected regulated prices to rise by 21.9% but saw an increase of 22.5%. While inflation is expected to decelerate until September, uncertainties remain, especially regarding fuel price fluctuations.

Export and import prices in June were influenced by decreasing prices of semi-finished goods, iron, steel, metal products, and mineral fuels. Export prices increased by 0.4% monthly, while import prices dropped by 0.1%.



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