Neither industry nor agriculture creates inflationary pressures
16.09.2016Company: Amcham
August’s industrial prices posted their first mom decline since February, thus reflecting further drops in oil on global markets. Agricultural prices also fell again. Today’s data release confirms the absence of cost pressures in the domestic economy. If these trends pass through into consumer prices, it might ease speculative pressures on the koruna’s appreciation for a while and thus temporarily relieve the CNB from intervening.
Industrial prices decreased 0.2% in August. Yet, the yoy decline narrowed from 4% to 3,4% due to a statistical base effect. The development reflects trends on global oil markets. Oil prices halted their growth in June after British citizens voted to leave the EU. Since then, oil prices have oscillated without a trend around the USD 45 per barrel level. So it is no surprise that the decrease in industrial prices occurred mainly in ‘coke, refined petroleum products’ accompanied by ‘chemicals’. In contrast, prices in the food industry increased despite a drop of agricultural prices.
Agricultural prices dropped 0.5% mom in August after they fell 1.2% in July. Similarly to July, the decrease is mainly due to summer seasonal effects, which mainly make fresh fruit and vegetables cheaper. In a yoy comparison, agricultural prices are still 6.9% lower. Thus, we cannot expect an increase of food prices for consumers due to developments in agriculture.
Construction work and material prices as well as market services prices did not change in mom terms. In a yoy comparison, prices in construction are 0.9% higher while market services increased negligibly 0.1%.
Tags: Finance |
