The Czech Republic has emerged as the leader in inflation within the European Union (EU), boasting the highest year-on-year increase in prices at eight percent, according to data from Eurostat, the Union’s statistical office. This sharp uptick in inflation contrasts with the EU’s average rate, which has dipped to a two-year low of 3.1 percent.

The Czech inflation rate surpasses that of Hungary, which had long held the top spot in the Union. Currently, Hungary’s inflation stands at 7.7 percent. Poland recorded a consumer price growth rate of 6.3 percent in October, while Slovakia saw a decrease to 6.9 percent. Interestingly, Belgium is experiencing deflation, with prices falling by 0.8 percent year-on-year in November.

The methodology employed by the Czech Statistical Office indicates a year-on-year increase of 7.3 percent in consumer prices for November, showing a slight decrease from 8.5 percent in October. Eurostat’s methodology, however, reported a higher year-on-year price increase of 9.5 percent for the Czech Republic in October.

It’s important to note that the calculation for the Czech Republic is influenced by a government-subsidized energy tariff that was factored into last year’s total inflation as an electricity discount. Lukáš Kovanda, the chief economist of Trinity Bank, explains that this tariff artificially lowered energy prices for households in the final quarter of the previous year, affecting the base for this year’s year-on-year comparison and contributing to the observed inflation increase in November.

Despite these figures, analysts point to a positive trend, noting that producer prices are falling, and consumer inflation is easing in most EU countries. In November, after Belgium, the lowest inflation rate among EU countries was in Denmark at 0.3 percent, followed by Italy with a 0.6 percent year-on-year increase. Compared to October, inflation rates eased in 21 of the 27 member states, remained unchanged in three, and increased in three.

Article by Prague Forum