April consumer inflation in Czechia slows sharply to 1.8%, but core inflation remains firm

According to the preliminary estimate from the Czech Statistical Office (CZSO), year-on-year consumer price growth in April slowed sharply to 1.8%, down from 2.7% in both February and March. This drop was mainly driven by lower food prices, which contrasted with last year’s price increases, as well as declining fuel costs. The April figure came in below analysts’ expectations of 2.1%.

Despite the overall slowdown, core inflation remains resilient, though it showed slightly milder momentum compared to the first quarter. Chief Economist at CBA, Jaromír Šindel, noted that the weaker headline inflation figure strengthens the case for the Czech National Bank (CNB) to cut interest rates to 3.5% at its upcoming meeting. However, he cautioned that strong underlying price pressures and ongoing economic uncertainties — including the effects of international trade tensions — could still argue for holding the rate steady at 3.75%.

Food prices, which fell significantly in April, contributed around 0.7 percentage points to the easing of annual inflation, while fuel prices added another 0.2 percentage points to the slowdown. According to preliminary estimates, core inflation likely held steady at 2.5% year-on-year, as in March, assuming a modest 0.5% month-on-month rise in regulated non-energy prices.

If confirmed, the seasonally adjusted month-on-month growth rate for core inflation would have eased to 0.2% in April, down from an average of 0.27% in the first quarter. This would translate to an annualised growth pace of 2.4% — slightly lower than the 3.3% recorded over the prior three months, but still above the CNB’s inflation target and its forecast of 2.1% year-on-year for the second quarter of 2026.

The CNB’s February projections had expected a slowdown in consumer price index (CPI) growth to 2.2% in the second quarter, alongside a steady rise in core inflation at 2.5%. While the latest inflation figures offer some relief, much of the easing appears linked to the volatility of food prices and a sustained drop in fuel costs, supported by current trends in global oil prices. However, uncertainties in the global economy — particularly around the impact of ongoing trade disputes — continue to add risk to the outlook.

Source: CBA