Czech Central Bank Says Inflation Was Only Marginally Above Forecast In March

The Czech National Bank released its comments on the latest CPI data, noting that inflation in March was only marginally (0.2pp) above the official forecast. Reminder that headline inflation eased to +15.0% Y/Y, matching the median estimate in a Bloomberg poll.

• The CNB said that inflation was above its forecast "due mainly to substantially faster growth in food prices," albeit "slightly slower growth in administered prices acted in the opposite direction."
• "Core inflation eased further in March [to +115% Y/Y] but remains elevated. Its decline reflects a gradual fading of foreign industrial producer price inflation and a downturn in the consumption of Czech households."
• "The observed price developments bear out the expectations of the winter forecast that inflation will decline quickly after a temporary acceleration in price growth at the very start of 2023."
• "In early 2024, both headline and monetary policy-relevant inflation will decline close to the 2% target, where it will stay until the end of the forecast horizon. This will be also fostered by tightened CNB monetary policy."
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