Czech Republic inflation rises to 1.9% in August

Inflation in the Czech Republic rose to 1.9% year-on-year in August, up from 1.7%, representing a 0.3% month-on-month increase. This figure aligns with market expectations and the Czech National Bank (ČNB) forecasts.

Food prices continued to decline, dropping 4.3% compared to a 3.1% decrease in July, driven largely by lower costs for dairy and meat products. However, analysts note that these significant decreases could lead to higher food inflation in 2027. Month-on-month price increases were supported by rising fuel costs and a faster-than-expected rise in non-energy, non-food goods.

On a positive note for the ČNB, the growth of service prices is gradually slowing, with momentum decreasing both year-on-year and month-on-month. While services related to housing maintain high price dynamics, momentum in recreation and culture has declined. Analysts expect inflation to return above 2% in the autumn months due to lower comparative bases and fuel costs.