Inflation in the Czech Republic jumped 16% in May, higher than expected and reached a new high of almost 30 years, according to statistics, as price pressures in the economy and in Central Europe remained strongly upward.
The figures add to the estimates that the Czech central bank will raise interest rates further when the board meets. with its current lineup for the last time this month.
Central Europe has faced tougher inflationary pressures than some other European countries, with low unemployment boosting consumer spending and rising energy and commodity prices.
In Romania, data also showed today that inflation reached 14.5%, marginally lower than analysts’ estimates.
Interest rates have risen in the past to deal with rising inflation, although signs point to slower interest rate hikes or even a cessation of tightening in the coming months.
Czech central banker Ales Michl, who has spoken out against interest rate hikes in the past year, will take over as governor from July, and has sought price stability.
Inflation data for May recovered from 14.2% in April and was much higher than the bank’s forecast of 14.9%.
The data raises expectations for a stronger rise from the central bank, with inflation expected to rise further this month, before peaking.
Last week, Romania’s central bank raised interest rates by 75 basis points, higher than expected, to 3.75%, for the sixth consecutive meeting.
Source: Capital
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