It is supposed to be just temporary inflation before global business shakes off coronavirus shock. Nevertheless, rising prices are a source of concern for households and investors in the Czech Republic, Western Europe and the United States. Domestic prices are growing the fastest in eight years, currently inflation in the figures of the Czech Statistical Office is evident mainly in transport. It is a consequence of significantly more expensive petrol and diesel, and car prices are also rising. Due to the lack of chips, for example, new Škoda cars are missing from the market. People will also pay extra for vegetables.
The growth also begins with rents, or the amount that current property owners could charge for renting real estate. This is also the reason why inflation in the Czech Republic is among the highest in the European Union. In this context, it is worth mentioning that Eurostat and the Czech Statistical Office use different methods of calculating consumer price inflation.
Some sharply rising items in the consumer price index are not. For example, the prices of steel and insulation materials rose by up to one hundred percent year on year, some wood products became even more expensive.
“Building prices make up only a relatively small part of the consumer basket. But the more alarming development of prices in the construction industry is, “said Petr Bartoň, an analyst at the Natland Group.
“Inflation does not affect most food so far, which is an item to which people are particularly sensitive in terms of price development,” adds Trinity Bank chief economist Lukáš Kovanda. “The rising price of building materials is contributing to a further rise in property prices. However, real estate price developments are not fully reflected in the calculation of consumer inflation, as the acquisition of real estate is statistically taken into account as investment rather than consumption. So, in this respect, the rise in building prices is not fully captured in consumer inflation. The consumer basket intended for the calculation of inflation is simply a statistical construct, “he added.
The economist warns that the Czechs do not yet perceive inflation in general to the extent that its impact actually occurs or will still occur. He argues not only by increasing world food prices, but also by the expected rise in energy prices. It is said that Bohemia is facing a difficult autumn.
In addition, companies have to deal with extreme increases in the cost of transporting goods. One way of the freight container to Asia and back came during the summer to high multiples of the prices from the beginning of the year.
The dramatic rise in transport costs is a reflection of the global collapse of freight transport, which has failed to cope with the spontaneous desire of consumers to spend, combined with China’s strict approach to coronavirus.
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Global shipping tensions peaked at the end of the holidays, when prices have risen the highest since 2010. At the same time, they continue to rise, literally from hour to hour.
“Interest in goods from Asia is currently extreme, but there is little free capacity. There has been a large increase in maritime transport prices, in some cases up to ten times, ” he says spokesperson of the online portal Mall.cz Pavla Hobíková.
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Lack of products and raw materials • VIDEO Videohub
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