PRAGUE, Feb. 14 (Xinhua) -- The Czech Republic registered a inflation rate of 3.6 percent in January, higher than previous prediction and above the tolerance threshold, the Czech National Bank (CNB) said on Friday.
The CNB has set an inflation target of 2 percent with one percentage point tolerance threshold in both directions, meaning that the current inflation rate is much higher than the upper tolerance threshold.
The figures are qualitatively in line with the CNB's initial estimates. However, January's consumer price index is 0.3 percentage points higher than the CNB's forecast of 3.3 percent -- the highest inflation rate since March 2012. This was primarily due to food price rise that was higher than originally forecasted, the bank said.
The central bank predicted that inflation will rise significantly higher than the upper boundary of the tolerance threshold for the first few months of 2020. According to its analysis, this rise will be mainly due to new changes in indirect taxes, for example, higher excise taxes on tobacco and alcohol, while domestic inflationary pressure persists.
The CNB predicted that higher inflation will remain for the most of the year 2020 and then fall to the level of near the 2 percent target by the first half of 2021 with help from the CNB's tightening of monetary conditions.