Czech Republic: prices of cigarettes and automotive fuel went up again


The level of consumer prices in June rose compared with May by 0.3%. Divisions 'alcoholic beverages, tobacco' and 'transport' had an upward effect on the consumer price level.

The year-on-year growth of consumer prices was 2.5% in June (up from 2.4% in May 2007). The month-on-month rise of the price level by 0.3% owed mainly to the price increase in tobacco products, which lasted for 6 months and reached 2.1% in June. Also a growth of prices of automotive fuel, which continued for the fifth month, slowed down to 1.3% in June. In 'housing, water, electricity, gas and other fuels', net actual rentals went up by 0.5% for dwellings with regulated rentals, prices of solid fuel by 1.7%. An increase in food prices was contributed to primarily by higher prices of fruit, poultry, milk and potatoes (2.6%, 3.9%, 4.2% and 4.3%, respectively). Prices of package holidays in ‘recreation and culture‘ increased with the upcoming summer season by 2.5%. In 'restaurants and hotels', prices of accommodation services went up by 0.7%.

A slightly downward effect on price development came from the fall in prices for 'clothing and footwear' due primarily to the upcoming summer sales of goods and the drop in prices in 'health', where amounts paid by patients for drugs with preion dropped by 1.3%. In 'miscellaneous goods and services', prices of beauty products decreased by 1.0%. In food, mainly the prices of vegetables grown for fruit went down by 13.4%, non-alcoholic beverages by 0.7% and prices of some kinds of spices fell too. Prices of goods in total increased by 0.3% and prices of services by 0.4%.

In terms of year-on-year comparison, in June 2007, the increase in consumer prices was 2.5%, i.e. 0.1 percentage point up compared to May 2007. An acceleration of price increase was recorded in 'alcoholic beverages, tobacco', where the tobacco product prices went up by 16.9% (from 14.5% in May). Prices in 'alcoholic beverages, tobacco' became a factor, which in June showed the most notable impact on the year-on-year growth of consumer prices, while prices in 'housing, water, electricity, gas and other fuels' moved to the second place in ranking order of the impact on year-on-year inflation. Prices in 'food and non-alcoholic beverages' remained on the third place (the same as in May). These three divisions of the consumer basket had a decisive impact on the year-on-year price development. Their contribution to the year-on-year increase in consumer prices was 2.0 percentage points. In housing, prices of electricity and solid fuels rose (by 7.9% and 18.8%, respectively). Water supply went up by 6.7% and sewerage collection by 5.5%. Net rentals paid for dwellings with regulated rentals increased by 12.0% and by 1.1% for dwellings with market rentals. In food, prices of bread and cereals were higher by 8.4% and prices of fruit by 7.2%.
A downward effect on the price level had mainly the drop in the natural gas prices by 8.2%. Prices of automotive fuel remained lower than in the previous year, in spite of their m-o-m growth by 1.7%. Prices of passenger cars dropped by 1.9%. Seasonal prices of vegetables including potatoes dropped by 6.8%. Cheaper than a year earlier were some kinds of food, such as, for instance, pork, oils and fats, coffee, tea, cocoa. Prices of clothing were moderately lower than in the previous year. Prices of electronic audio-visual, photographic and cinematographic equipment and personal computers in the division 'recreation and culture' decreased too. Prices of goods in total grew by 2.1% and prices of services by 3.0%. Inflation rate, i.e. the increase in the average consumer price index in the twelve months to June 2007 compared with the average CPI in the previous twelve months, stood at 2.1% in June (the same as in May 2007).

According to preliminary data of Eurostat, the year-on-year increase in the average harmonized index of consumer prices (HICP) in the EU 27 member states was 2.1% in May (0.1% percentage point down on April). The highest annual rates were observed in Hungary (8.4%) and Latvia (7.8%), and the lowest rates in France and Sweden (both 1.2%). In Malta, they were 1.0% down compared to May 2006. The growth of consumer prices in Slovakia slowed down to 1.5% in May (from 2.0% in April). The price level in Germany rose by 2.0% (the same as in the previous two months).

According to preliminary calculations, the HICP in the Czech Republic in June 2007 increased by 0.3% month-on-month and accelerated to 2.6% (from 2.4% in May 2007) year-on-year. The MUICP (Monetary Union Index of Consumer Prices) flash estimate for the Eurozone in June 2007 was 1.9% year-on-year, as Eurostat announced. (

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