April 13 (Reuters) - Czech headline inflation slowed to
a rate of 15.0% in March, falling a second-consecutive month to
its lowest since April last year, although staying high enough
for the central bank to maintain its hawkish tone on interest
rates.
Consumer prices rose by 0.1% month-on-month, as expected in
a Reuters poll, while the year-on-year decline was a touch less
than a forecast of 14.9%. The statistics office said a drop in
fuel prices and a high base in 2022 were factors behind the
slowdown.
The Czech National Bank (CNB), which sharply hiked rates by
675 basis points to 7.00% between June 2021 and June 2022 to
combat price growth, had expected headline inflation at 14.8% in
March.
It is counting on a drop into single digits in the second
half of the year, but it has not yet shifted away from talk of
another possible rate hike toward chances of cuts.
With inflation still running high, most central European
policymakers are pushing back against rate cut expectations.
"March inflation did not bring any surprises even for the
CNB," UniCredit economist Patrik Rozumbersky said. "The CNB's
focus will remain concentrated on wage growth, which could
revive considerations of increasing rates."
Statistics office data from Romania on Thursday also showed
still-high price growth of 14.53% last month.
March data from Hungary on Wednesday showed inflation easing
less than expected to 25.2%, backing expectations that the
bank's base interest rate of 13% - the highest in the European
Union - would remain elevated.
Headline inflation in Poland also stayed above 16% last
month, according to the preliminary data released earlier.
Central Europe's economies are all facing stronger inflation
than in the euro zone, with high food prices a major factor.
Czech central bank Governor Ales Michl called market bets on
the timing of rate cuts premature after the last policy meeting
on March 29.
Two new bank board members were quoted as saying in
different media interviews on Thursday that rate cuts could not
happen until inflation was lower.
(Reporting by Jason Hovet in Prague; Editing by Sharon
Singleton)
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