CPI declined in line with market expectations in March. The m/m change amounted to 0.7%. The y/y figure declined from 6.2% in February to 5.9% y/y in March. This was enabled by moderate rise in food prices (+0.4% m/m), as well as by weaker increase in the majority of other categories, namely housing and energy prices (+0.7% m/m), household improvement and maintenance (+0.3% m/m), as well as in the categories of healthcare, leisure and education. On the other hand, clothing prices rose by 2.2%, which sent the y/y figure up from 4.0% in February to 5.5% in March; however, the monthly decline in March last year was not typical for this month. Prices in transportation rose as expected as car fuel prices went up 2.8% m/m in March. We may expect further rises in fuel prices in coming months.
Core inflation rose by 0.5% m/m, sliding from 6.7% y/y in February to 6.2% y/y in March. March CPI came out in line with central bank’s plans. Therefore it supports the hopes for another small rate cut after the elections.
Jakub Dvorak, CSOB