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Last month, Czech consumer prices saw their biggest drop in over a decade

Package vacation and some food prices dropped, while education became more expensive

Consumer prices in the Czech Republic saw their biggest month-on-month drop in September 2019 since September 2006, with a decrease of 0.6% compared with August. The year-on-year growth of consumer prices slowed to 2.7% in September, with the increase due largely to housing prices, according to the Czech Statistical Office (ČSÚ).

In the month-on-month comparison, the decrease in overall consumer price level in September came mainly from price drop in recreation and culture, where prices of package vacations went down by 23.6% due to the end of summer season.

In food and non-alcoholic beverages, prices of vegetables were lower by 4.5%, with potato prices dropping by 8.7%. Prices of non-alcoholic beverages were lower by 1.7%, fruit by 2.0%, and butter by 4.6%.

Not all food prices went down. Milk, cheese, and eggs went up by 0.6%, bread and cereal prices were higher by 0.5%, and sausages and smoked meat by 0.6%.

The price increase in clothing and footwear was influenced by garment prices rising 1.4% and shoes and other footwear prices by 1.3%. In alcoholic beverages and tobacco, prices of spirits were higher by 1.1% and wine by 1.2%. In restaurants and hotels, prices of catering services increased by 0.8%.

Education was also more expensive, with higher education rising the most. As the new school year started, prices in education overall rose by 3.7%. Fees in kindergartens increased by 3.1%, tuition fees at private secondary schools by 4.1%, school fees at public universities by 10.1%, fees for foreign language learning by 2.1%, fees in basic art schools by 1.9%, and fees in after school care centers by 3.2%.

Prices of goods in total remained unchanged compared with August and prices of services went down by 1.3%.

In the year-on-year comparison, in September consumer prices increased by 2.7%, which is 0.2 percentage points down from August. A slowdown in the year-on-year price growth occurred mainly in food and non-alcoholic beverages, where vegetable prices rose by 11.7% in September (compared to 34.1% year-on-year in August).

Egg prices were lower by 13.2% in September (10.4% in August), oils and fats by 10.0% (4.3% in August), fruit by 7.4% (4.9% in August).

A slowdown in the year-on-year price growth also occurred in recreation and culture, due to prices of package vacations, which rose by 6.0% in September (7.8% in August).

Price development in transport was influenced mainly by prices of transport services, which turned from a decline by 7.1% in August to the growth by 0.9% in September. The main reason was their strong month-on-month price drop in September 2018 due to the introduction of nationwide fare discounts in bus and rail transport.

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The biggest influence on the growth of the year-on-year price level in September came again from prices in housing, water, electricity, gas and other fuels, where prices of actual rentals for housing went up by 3.8%, water supply and sewage collection identically by 2.6%, electricity by 9.9%, natural gas by 3.6%, heat and hot water by 5.1%.

Next in order of influence were prices in food and non-alcoholic beverages, where prices of sausages and smoked meat were higher by 7.6%, yogurts by 6.0%, and potatoes by 40.3%.

Increases were also seen in restaurants and hotels, where prices of catering services increased by 5.1% and prices of accommodation services by 3.0%.

A year-on-year drop in September price levels came again on clothing and footwear due to prices of garments dropping 3.3%. Communication prices dropped by 1.6%.

Prices of goods in total and services went up 2.0% and 4.0%, respectively. The overall consumer price index excluding imputed rentals for housing was 102.5%, year-on-year.

The inflation rate, that is the increase in the average consumer price index in the 12 months to September 2019 compared with the average CPI in the previous 12 months, amounted to 2.6%.

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