Central Bank Says April Core CPI Inflation Was Slower Than Expected

The Czech National Bank released their comments on the latest inflation outturn, which saw headline CPI inflation print at +12.7% Y/Y, undershooting both the median estimate in a Bloomberg poll (+13.3%) and the CNB's spring projection (+13.2%).

• The central bank echoes earlier comments from local analysts and notes that the decline in price growth was "mainly to markedly slower annual food price inflation." They stress that "the overall deviation of inflation in April from the forecast should not be overestimated, since food prices are traditionally volatile and have mostly been higher than expected in recent times."
• The CNB write that "slightly lower-than-expected core inflation also contributed, albeit to a much lesser extent." Core CPI inflation was +10.0% Y/Y in April, missing the CNB's spring projection of +10.2%.
• "The observed price developments bear out the expectations of the spring forecast that inflation will continue to decline quickly during spring and summer. (...)Annual consumer price inflation will fall to single digits roughly in mid-2023. It will decline to the CNB’s 2% target over the monetary policy horizon, i.e. in 2024 Q2 and Q3."
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