Czech Inflation Slows by 0.3 percent as Central Bankers Plans on Price Growth

Czech Statistical Office reported Wednesday that the nation's inflation rate has slowed down to 0.3 percent in August, from July's 0.5 percent.

Bloomberg reported that prices dropped by 0.2 percent every month, compared to a 0.1 percent drop in July. Bloomberg survey's average estimate was a 0.4 percent annual price increase and a 0.2 percent monthly decrease, but the central bank saw a 0.7 percent inflation in August. Meanwhile, the drop in commodity prices is affecting the central bank's progress in improving price growth using non-conventional tools.

According to RRT News, the slow down of Czech's inflation rate is largely due to the decrease in auto fuel prices. The ease in inflation rate was the lowest it has been since March when it was 0.2 percent. It was originally expected to slow down to 0.4 percent.

As the nation's economy progresses, Czech job vacancies are off the roof at 100,000 in August, the first time it has been this high since 2008, according to EuroActiv.

The prices in the transport industry also dropped as due to the 12 percent low automotive duel prices in August. Consumer prices also went down to 0.2 percent per month, as projected by most economists. This is due to the 0.1 percent decrease in prices of food and non-alcoholic beverages in July. Prices of goods went down 0.5 percent from July, while the cost of service increased to 0.3 percent.

General Investments CEE chief economist Radmir Jac said, "Even as the Czech economy is reporting great statistics on GDP growth, rising household consumption and labor market trends, the data are also confirming absence of inflationary pressures."

Presently, Policy makers in Prague are discussing the span to stimulate the economy by limiting the currency gains as the fast growth of the GDP is not leading to price growth. The bank plans to cap the koruna until July next year, as rate setters suggest loose policy should be practice until after 2016.