PRAGUE: Czech consumer prices rose faster than expected in March, reaching the top of the central bank's target band for the first time since 2012, statistics office data showed on Wednesday.
Prices rose 0.2 percent on a monthly basis, putting the year-on-year inflation rate at 3.0 percent, after a reading of 2.7 percent in February and above expectations of 2.9 percent in a Reuters poll.
The headline inflation figure was above the Czech National Bank's prediction of a 2.7 percent year-on-year rise for March.
The central bank, which targets inflation at 2 percent with a tolerance band of +/- 1 percentage point, has stopped raising interest rates after starting to tightening in 2017. It raised rates five times year, the most in Europe.
The bank said after its March 28 meeting, when it left its two-week repo rate at 1.75 percent, that it saw no reason to rush into the next increase, and it also moderated its view of inflationary risks amid slowing European growth.
Analysts said the inflation data probably peaked last month, when electricity bills for households rose as new contracts came into effect.
"Inflation data confirm a string of data from the Czech economy speaking in favour of tightening monetary policy, but risks and uncertainties related to foreign economic developments are leading the bank to hold rates stable at the moment," said Radomir Jac, chief economist with Generali Investments CEE.
He added he expected inflation to slow but stay above the 2 percent target this year. "The central bank will not hurry with raising rates," he said.
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