Consumer prices fell in September by 0.7% m-to-m, i.e. more than expected (Patria forecasts of a 0.4% fall was the most bearish). Annual inflation slowed to 4.7% from its peak 5.9% y-to-y in July. Net inflation, targeted by the Czech National Bank, reached even starker -1.0% m-to-m in September, and it now stands at 3.1% y-to-y, right in the middle of the CNB's target of 2-4% for the year-end of 2001. Food prices fell by 0.9% in September, as expected, but chronically volatile tourism prices fell by 7.0% m-to-m, eliminating their pre-season accummulation. The low inflation probably brushes aside any considerations of the CNB's raising interest rates by the end of this year.
(David Marek)