Consumer prices fell more than expected in August. The most of it is a seasonal decrease of food prices driven by vegetables and fruit. Also household equipment pushed the index lower. On the other side, prices of clothes, health and transport went up. The year-on-year inflation did not speed up and stayed at 1.7 pct. Core inflation remains negative and indicates that no inflationary pressures come from the domestic economy. The August data, therefore, confirm that no rate hike is on the agenda any time soon. Monetary tighteing may come in mid-2012. The timing will mostly depend on how the downturn in the Eurozone weighs on the Czech economy.
CPI actual (Aug): -0.3 % m/m, 1.7 % y/y
Consensus: -0.1 % m/m, 1.9 % y/y
Previous (Jul): 0.3 % m/m, 1.7 % y/y