Annual inflation rises to 3.37% in July while month-on-month growth declines
Price movements remained mixed in July 2020 as prices for some products and services saw a slight increase in growth rates, and some markedly declined. These findings are presented in the new issue of Consumer Price Dynamics, an information and analytical commentary.
Annual inflation went up by 0.16 pp to 3.37%, driven in the first place by the effect of a low base of food and utility prices. Current inflation slowed somewhat, which is evidenced by seasonally adjusted indexes of consumer price dynamics. Seasonally adjusted month-on-month growth in consumer prices and the steady components of price movements both declined in July.
At the same time, changes in prices on a number of products and services diverged. Some logged an acceleration in price growth on the back of a rebound in demand, which emerged once coronavirus pandemic-linked restrictions were relaxed. These first of all include health centre services and motor fuel. Concurrently, a decline was registered in the prices of some other products and services. For instance, seasonally adjusted utility prices moved downwards as they were indexed only partially in a number of regions, in line with regional consumer support programmes.
In the near future, the disinflationary impact of weak demand is set to bring about decreased month-on-month price growth. Annual inflation is expected to rise in the remainder of 2020 as comparison with its low readings of 2019 H2 gradually loses relevance.
