On Wednesday, December 10, the Czech Statistical Office published inflation data for November 2025, which once again matched the preliminary estimate.
- Year-on-year inflation fell from 2.5% in October to a six-month low of 2.1%, while market expectations were slightly higher.
- This level is very close to the Czech National Bank’s (CNB) inflation target of 2.0%.
- Goods prices increased year-on-year by 0.6% (compared to 1.3% in October), while service prices, which continue to be the main driver of inflation, rose by 4.6%, the same as in October.
- Month-on-month inflation in November was -0.3%. The cumulative month-on-month inflation over the past three months thus stands at -0.4%.
- The Harmonised Index of Consumer Prices (HICP) according to Eurostat methodology fell from 2.3% in October to 1.8%, which is below the euro area inflation rate of 2.2%.
Structure of Inflation
- Housing: Electricity prices fell by 5.0% (October: -3.3%), gas prices dropped by 8.5% (October: -7.9%), water charges have been up 4.2% year-on-year since January, and sewage charges have maintained a long-term increase of 3.7%.
- Rent: Up by 6.2% (October: +5.8%), while imputed rent increased by 4.8%, the same as in October. These figures confirm continued pressure on housing costs despite the overall slowdown in inflation.
- Food, alcohol, and tobacco: Up by 2.8% (October: +3.9%). The decline was influenced by lower food prices (e.g., fruit -6.6%, butter -17.7%). The largest increases were seen in beef and veal (+25.1%), poultry (+11.9%), coffee (+23.8%), and cocoa (+16.9%).
- Catering services: Up by 4.3% (October: +4.4%), accommodation services up by 6.8% (October: +6.6%), confirming that services remain the segment with persistent price pressures.
Inflation is just above the CNB’s 2% target and just below the CNB’s own forecast of 2.2%.Jakub Matějů, Deputy Executive Director of the Monetary Department and Director of the Macroeconomic Forecasting Division stated:
“We welcome the decline in inflation but would like to point out that it is driven by volatile items of the consumer basket such as food and alcohol. The good news on low price growth in these categories may easily be followed by a surprise in the opposite direction. It is therefore important that inflation also subsides permanently in sectors where it is persistently elevated, especially in services.”
Compared to the commentary on October inflation, there is no significant change in tone. The CNB continues to highlight risks in the services sector and the volatility of certain items, however the current figures give it room to consider a gradual easing of monetary policy in the coming quarters.
According to Eurostat’s HICP methodology, inflation in the Czech Republic is lower than in the euro area. In the Czech Republic, it stands at 1.8%, compared to 2.2% in the euro area. Among the above-average rates are, for example, Germany at 2.6% and Slovakia at 3.8%. From the perspective of inflation, the Czech economy has thus moved from the top ranks of the European table towards its middle.
The CNB Bank Board will meet on December 18. The above statement signals that interest rates are likely to remain unchanged. The CNB would only consider a rate cut at the current pace of Czech economic growth if there were a significant change in the external environment—for example, if the US Fed at its meeting today or the ECB after its meeting on December 17 were to take an unexpected step or issue a markedly surprising subsequent statement.