Czech consumer price growth slows in January 2025

Consumer prices in the Czech Republic rose by 1.3% on a month-on-month basis in January, driven primarily by increases in food, non-alcoholic beverages, and alcoholic beverages. The year-on-year inflation rate stood at 2.8%, marking a 0.2 percentage point decline from December’s figures.

Month-on-Month Inflation Trends

January saw a notable price increase in food and beverages, with vegetables rising by 7.1%, fruit by 6.5%, and non-alcoholic beverages by 4.1%. Dairy products such as cheese and curd also saw a 4.1% rise, while poultry prices increased by 5.7%. In the alcoholic beverages category, wine prices surged by 13%, spirits by 10.8%, beer by 3.5%, and tobacco products by 0.4%.

The cost of package holidays under the ‘recreation and culture’ sector rose by 5.7%. However, the overall price level was tempered by a decline in clothing and footwear prices, with garments dropping by 1.9% and footwear by 2.7%. Egg prices also fell by 6.6%. In total, goods prices rose by 1.5% while services saw a 1% increase.

Year-on-Year Inflation Analysis

Head of the Consumer Price Statistics Unit at the Czech Statistical Office (CZSO), Pavla Sediva, highlighted the key drivers of inflation: “Year-on-year price development in January was significantly influenced by food and housing costs. Food prices continued to rise, increasing by nearly 5% compared to last January, while housing price growth slowed to 1.3%.”

The annual inflation rate of 2.8% in January was mainly impacted by housing costs, utilities, and fuel prices. The cost of water supply increased by 4.2%, sewage collection by 3.7%, and heat and hot water by 4.7%. However, electricity prices shifted from an 8% increase in December to a 4.7% decline in January. Natural gas prices also fell by 7.7%.

Food and beverage prices played a major role in inflation acceleration. Prices of milk, cheese, and eggs rose by 8%, fruit by 7.4%, while vegetable prices saw a smaller annual decline of 0.7%, compared to the 5.1% drop in December. Sugar prices declined by 21.6%, a significant improvement from December’s 30.4% drop. Meat prices rebounded, rising by 3.5% after experiencing a decline in December.

Egg prices saw a sharp year-on-year increase of 24.7%, butter surged by 40.5%, and chocolate products became 27.8% more expensive. Meanwhile, alcoholic beverages and tobacco also contributed to inflation, with spirits prices up by 3.6%, beer by 1.8%, and tobacco products by 7.4%. In the services sector, catering services rose by 5.2%, while accommodation services surged by 8.7%.

Conversely, price decreases were noted in the clothing and footwear sector, with garments becoming 1.2% cheaper and footwear declining by 4.3%.

Housing and Owner-Occupied Costs

Owner-occupied housing costs (imputed rentals) increased by 2.9% in January, up from December’s 1.7% rise, largely due to an increase in new real estate prices. The overall consumer price index, excluding owner-occupied housing costs, was recorded at 102.8% year-on-year.

The consumer price base index, benchmarked to 2015 averages, stood at 154.0% in January, up from 152.0% in December. The 12-month average inflation rate reached 2.5%, a slight increase from December’s 2.4%.

Harmonized Index of Consumer Prices (HICP)

Preliminary calculations indicate that the Harmonized Index of Consumer Prices (HICP) in the Czech Republic increased by 1.4% month-on-month and 2.9% year-on-year, down from 3.3% in December.

Eurostat’s flash estimates showed the Monetary Union Index of Consumer Prices (MUICP) at 2.5% year-on-year in January, slightly up from 2.4% in December. In Germany, inflation was recorded at 2.8%, while Slovakia reported a 4.1% increase. Croatia had the highest inflation rate at 5.0%, while Ireland reported the lowest at 1.5%.

In the EU-27, the average HICP increase in December was 2.7%, marking a 0.2 percentage point rise from November. The highest inflation rate was recorded in Romania (5.5%), while Ireland had the lowest (1.0%).

Despite a continued rise in consumer prices, inflation in the Czech Republic showed signs of slowing in January, particularly in the housing and utilities sector. However, food, beverages, and services remained key inflationary drivers. The coming months will determine whether this trend continues or if external factors push inflation higher again.

Source: Czech Statistical Office