Czech Inflation at 2.8% in January, Driven by Rising Food Prices

The Czech Statistical Office confirmed that inflation in January was 2.8%, mainly driven by rising food prices.

Consumer prices rose 2.8% year-on-year in January, slightly lower than in December. Prices also increased 1.3% compared to the previous month, mainly due to higher costs in food, alcohol, and tobacco.

December’s Christmas discounts had temporarily slowed inflation, but food prices are now rising again. At the end of last year, agricultural producer prices jumped 8.1%, adding pressure on food costs.

Compared to last year, food prices were almost 5% higher, while housing prices grew more slowly, up 1.3%. Prices of goods increased 1.7%, while services became 4.7% more expensive.

The cost of rent also rose, driven by higher property prices.

Despite some price relief in services, inflation remains high, particularly in the food sector. The Czech National Bank (CNB) is expected to continue cutting interest rates, but only at meetings when new forecasts are released.

The next cut is likely in May, with the final one in August, bringing rates down to 3.25%.

Inflation is expected to rise slightly to 2.7% this year, possibly exceeding 3% in the middle and later months. The CNB forecasts inflation to average 2.4%, but food prices could push it higher.

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