The inflation rate in the Czech Republic is showing a steady decline, reaching 1.5% in March, according to the Czech Statistical Office (CSU). This figure marks a decline of 1.7 percentage points from February, making it the lowest year-on-year inflation rate since April 2021. The rate of inflation had risen by 0.1% month-on-month in March, compared to 0.5% in February.

Although the decline in inflation can be partly attributed to the higher comparison base from last year, the main reason for the decline is the fall in fuel and oil prices, which has led to a 19% drop in transport prices year-on-year. The housing sector has also seen some changes, with natural gas prices experiencing slower growth (+60% compared to 74.3% in February), while rent prices increased by 6.7%. Water prices increased by 16.3%, wastewater prices by 30.3%, electricity by 29.6%, solid fuels by 53.7%, and heat and hot water by 44.6%.

Food prices have continued to rise significantly, with rice prices up by 32.9%, flour prices up by 32.6%, and pork prices up by 34%. Other items that have seen a rise in prices include semi-skimmed long-life milk (45.2%) and sugar (97.6%). On the other hand, the prices of comprehensive holiday packages rose by 24.6%, while goods and services increased by 17% and 11.7%, respectively.

Despite the overall decline in inflation, some items still experienced price increases in March. Vegetables rose by 5%, and pork and semi-skimmed long-life milk prices also increased. However, the prices of eggs fell by almost a tenth, while butter prices decreased by 6.3%.

The current inflation rate in the Czech Republic is still relatively high, but the decline over the past few months is a positive development. While prices for some goods and services continue to rise, the fall in fuel and oil prices has contributed significantly to the overall decline in inflation.

Article by Prague Forum