CPI continued declining in November, albeit at slower pace than expected
- November CPI inflation slowed down from 5.1% y/y to 4.9% y/y, which was slightly above our and market forecasts (or estimate was 4.8%, market's 4.7%). Inflation continues in a declining tendency mainly because food prices do not increase in such extent as in the last year.
- On a monthly basis, prices grew by 0.2% in November, due to increase in the prices of tobacco (by 7% as we expected) and increase in imputed rents, which slightly outpaced our expectations (the equivalent of homeowners rent increased by 2.7% versus our estimate at 2.0%). Positive impact on inflation had declining fuel prices (-9.2% m/m) and a slight decline in food prices.
- Higher excise tax on tobacco will likely show up also in December inflation figures (we expect further growth by 5%). In contrary, prices of fuels will again have anti-inflationary impact (we expect another fall by 9%). December might see another increase in imputed rents. Nevertheless, inflation will likely continue gradually declining in coming months. We expect inflation to stay below 4.5% at the beginning of next year (and HICP to stay below 4% y/y).
- Based on today's figure, we expect that harmonized inflation might reach 0.1% m/m in November, which would translate into an annual growth of 3.8-3.9% (after 4.2% in October).
