According to the European HICP index, domestic prices rose by 19.1 percent year-on-year, so the increase in prices accelerated even more towards autumn. The national consumer price index was “only” 17.5 percent, because the Czech Statistical Office (CZSO) includes the so-called imputed rent, i.e. the costs of private homeowners for repairs.
In terms of inflation, for the first time the Czech Republic ranked among the Baltic countries, where prices usually rise the fastest, and according to Eurostat, in the whole of Europe, it gained a position behind Latvia and Hungary, where the year-on-year inflation rate increased to 25.7 percent from December’s 24.5 percent.
However, the domestic month-on-month increase in prices by 6.6 percent (according to the national index by 6 percent) became even more unique. The second country where prices rose significantly at the turn of the year was Slovakia, with 2.7 percent. Elsewhere, the month-on-month increase did not exceed one percent, and across Europe prices fell on average compared to December.
Highest month-on-month inflation in January
| 2021 | 2022 | 2023 | ||||||
|---|---|---|---|---|---|---|---|---|
| 1. | Germany | 1,4 | Czechia | 4,6 | Czechia | 6,6 | ||
| 2. | Czechia | 1,3 | Slovakia | 2,8 | Slovakia | 2,7 | ||
| 3. | Estonia | 0,5 | Lithuania | 1,9 | Austria | 0,8 | ||
| 4. | Lithuania | 0,5 | Denmark | 1,6 | Estonia | 0,7 | ||
| 5. | Latvia | 0,4 | Belgium | 0,9 | Latvia | 0,7 |
Government intervention contributed to the Czech exception. “The rise in prices was significantly influenced by the end of the Savings Tariff for Households in the form of an energy subsidy,” recalled Pavla Šedivá from the CZSO. The introduction of the Savings Tariff, together with the exemption of households from the allowance for renewable sources of electricity, reduced the level of inflation by 3.6 percent from October 2022. Since January, only the exemption from the fee for renewable sources has been valid, so consumer prices suddenly increased by almost three percent.
The second main reason why prices are rising in the Czech Republic is the habit of domestic companies to increase their prices at the turn of the year. And this time the adjustments were more radical than in previous years. In January, the prices of water, sewage and heat increased by tens of percent month-on-month, the prices of alcoholic and non-alcoholic beverages, pork and eggs rose by almost ten percent, and tours also became more expensive.
Food prices continue to rise in January
| Name | Amount | Price for January 2022 | Price for January 2023 | % Change |
|---|---|---|---|---|
| CRYSTAL SUGAR | 1 kg | 15,55 | 30,46 | 96 |
| FRESH HEN EGGS | 10 ks | 29,37 | 56,54 | 93 |
| Icing sugar | 1 kg | 19,61 | 35,06 | 79 |
| PORK lard | 1 kg | 64,09 | 104,66 | 63 |
| VEGETABLE SPREADABLE FAT | 1 kg | 102,35 | 165,18 | 61 |
| CHILDREN’S LIGHT COOKIES | 100 g | 7,72 | 12,00 | 55 |
| WHEAT FLOUR, SMOOTH | 1 kg | 15,00 | 22,16 | 48 |
| FATBACK | 1 kg | 94,18 | 136,10 | 45 |
| VEGETABLE OIL | 1 l | 43,70 | 62,88 | 44 |
| WHOLE MILK LONG-TERM | 1 l | 16,53 | 23,78 | 44 |
Note Own calculations from CZSO data may not exactly match the cleaned indices.
It is not priced in a similar way anywhere in Europe. For example, in January of last year, prices in the Czech Republic increased by 4.5 percent month-on-month. This was not repeated by any country from the European twenty-seven last year.
During the rest of the year, domestic prices usually do not rise that much. “We experienced an extreme in January,” confirms Josef Vlášek from the statistical office. “It will not happen again because we have exhausted most of the expected growth,” he adds. It is true that inflation can still be affected by the expected increase in postal fees, or the increase in rent will be reflected in it. Nevertheless, it is possible that the month-on-month growth of inflation will be around zero in the coming months.
