Thursday, 5 March 2026
Annual inflation in the Czech Republic slowed to 1.4% in February, marking the lowest rate since October 2016, according to a preliminary estimate released by the Czech Statistical Office (ČSÚ).
Consumer prices declined by 0.1% compared with January. Final figures are scheduled for publication on 10 March. In recent months, final data have confirmed preliminary estimates.
In January, annual inflation stood at 1.6%, also the lowest level in more than nine years. Analysts previously attributed part of the slowdown to changes in the financing of renewable energy support, with costs shifted from households to the state budget.
Energy prices were 7.8% lower year-on-year in February. By contrast, services recorded annual growth of 4.5%. Prices of goods declined by 0.7% compared with the same month last year.
Food and non-alcoholic beverages were 0.4% more expensive year-on-year, while tobacco and alcoholic drinks increased by 4%. Excluding energy, consumer prices would have risen by 2.7% annually in February.
On a month-on-month basis, energy prices were broadly unchanged. Services rose by 0.5%, while goods prices fell by 0.5%. Food and non-alcoholic beverages were 1.5% cheaper than in January, and alcohol and tobacco prices declined by 1.2%.
Economists attribute the further easing of inflation mainly to lower food prices. Agricultural producer prices and food industry prices have been in decline, reflecting last year’s strong harvest, particularly in crop production.
At the same time, analysts note that services inflation remains elevated. Annual growth in services prices slowed slightly from January’s 4.7% to 4.5%, but continues to reflect pressure in the housing market, including rents and imputed rents, which measure the cost of owner-occupied housing.
Looking ahead, analysts highlight geopolitical developments as a key risk factor. Tensions in the Middle East have led to higher oil and gas prices in recent weeks. Should energy prices continue to rise for a prolonged period, inflation could increase again later in the year.
If commodity prices stabilise, analysts expect inflation to remain close to the Czech National Bank’s 2% target in 2026. However, sustained increases in oil and gas prices could alter that outlook.
Given the current inflation trajectory and continued pressure in services, economists do not expect the Czech National Bank to adjust interest rates in the near term. The central bank’s main policy rate currently stands at 3.5%, and some analysts anticipate it may remain at that level for the rest of the year.
Source: CTK
