Moderation of inflation growth continues, it was at the level of 10.8% before the summer

Growth in June was mainly influenced by a faster decline in fuel prices by almost 19%, food prices rising below 20% and housing with energy and services below 10%. The positive thing is that the month-on-month increase in food prices has stopped for the first time since August 2021.

Consumer prices of goods and services in June 2023 increased by 0.2% month-on-month. Year-on-year inflation has been growing unceasingly since 2021, but in the fourth month, its dynamics dropped to the level of 10.8%. These are still high values since the beginning of the millennium.

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Monthly development – June 2023 compared to May 2023

Prices rose month-on-month in 9 out of 12 monitored divisions (household expenditure groups). The most significant impact on the overall result was growth in the transportation division, in which the operation of transport equipment increased again by 1.3%, of which fuel prices increased the most by 1.6%.

With the arrival of summer, the prices of package holidays also increased by 6%, and people also paid more in restaurants and cafes by 1%.

Food prices had a dampening effect on month-on-month growth, the growth of which stopped in June for the first time since August 2021 and remained at May's level. Prices dropped in 5 out of 9 monitored food items. The prices of milk, cheese, and eggs were lower by 1.7%, decreasing for the third consecutive month. Month-on-month prices were also lower for bread and cereals by 0.4%, for vegetables by 1.4% and for oils and fats by 3.5% (mainly due to a decrease in the prices of butter and margarine). Compared to May, the prices of meat still rose by 0.7%, fruit by 6.1% and sugar and confectionery by 0.8%. Non-alcoholic beverages recorded a decrease by 0.2%, coffee and mineral waters had lower prices.

Lower housing and energy prices also contributed to the moderation of growth, they dropped by 0.1% month-on-month for the first time in two years. This was mostly due to the lower prices of thermal energy by 1.3%, as well as the prices of imputed rent by 0.1%, which last decreased in January of this year.

Of the other less significant items, the prices of alcoholic beverages, household maintenance goods and services, pharmaceutical products, personal care services, social services and clothing prices increased.

In June, compared to May, the consumer price index decreased in households of employees, in low-income households by 0.2%, and in households of pensioners it increased by 0.1%.

Year-on-year development - June 2023 compared to June 2022

Year-on-year inflation decreased to 10.8%, this level was recorded last in March 2022. Higher prices were recorded in 11 of the 12 monitored expenditure groups (sectors) of households, six sectors still recorded a double-digit growth. A decrease in prices continued only in the transport sector.

Prices of food and non-alcoholic beverages, which are one of the most important items in household expenditures, had the greatest impact on overall inflation. They have been growing continuously for the third year and in June they rose by 19% year-on-year, which are the values of a year ago. The dynamics of growth slowed down for the third month, but higher prices by more than 20% were still recorded in 5 out of 9 monitored food groups. The most significant increases were recorded in prices of bread and cereals by 20%, milk, cheese and eggs by 21.6%, as well as vegetables by 25% and sugar and confectionery by 28.5%. Soft drinks increased by 17.7%.

Before the summer, the overall result of inflation was affected by higher prices in food and beverage service activities by 12.9%, of which mainly in restaurants and cafés by 14.7%, as well as higher prices of accommodation services by 9.5%. Prices of goods and services of personal care continued to grow by more than 15%, of which mainly other equipment and products by 17.4%. Clothing and education also recorded higher prices.

Price growth in the division of housing and energy, which is also one of the most significant items and together with food represent almost a half of all household expenditures, was currently at the level of 9.7% in June. It recorded a value below 10% last in December 2021. Prices of solid fuels increased by 37.1% and heat energy by 17.7%, as well as maintenance and repair of the dwelling by 15.6% or waste collection by 17.2%. The long-term impact of the rise in prices of construction materials is reflected in imputed rent, which recorded a year-on-year price growth of 6% in June, it was the lowest value in the last two years.

Year-on-year price growth was moderated only by the transport sector, where prices decreased by 5.1%. The greatest impact was a decrease in fuel prices, which were by 18.6% lower year-on-year.

In June 2023, the consumer price index increased year-on-year in households of employees by 10.7%, in low-income households by 11.6% and in households of pensioners by 11.4%.

In total, for the first half of 2023, consumer prices increased by 13.6% year-on-year (in households of employees by 13.5%, in low-income households by 14.5% and in households of pensioners by 14.5%).

Development of core and net inflation

In June, the total annual inflation rate was 10.8%, core inflation reached 11.6% and net inflation reached 9.3%. Month-on-month, core inflation reached 0.3% and net inflation 0.4%.

Core inflation was affected by price level growth after excluding the impact of changes in regulated prices (e.g. energy prices) and other administrative measures (e.g. tax adjustments, etc.). Net inflation is core inflation without changes in food prices.