Global| Oct 08 2004September CPI Trends Diverge Among Four Central Europe, Latin American Countries
Summary
The current inflation picture differs widely among various countries, as is highlighted among the four that reported September CPI data just today. Two that have modest uptrends in consumer prices, the Czech Republic and Lithuania, [...]
The current inflation picture differs widely among various countries, as is highlighted among the four that reported September CPI data just today. Two that have modest uptrends in consumer prices, the Czech Republic and Lithuania, are at the same time experiencing firming in their price movements compared with the last year or two. In contrast, countries where current inflation looks higher, Brazil and Slovakia, are actually seeing some slowing from the pace that prevailed in 2002 and 2003.
In two countries where we examined CPI components, it appears that administered prices might be at least partially responsible for the divergent behaviors. In the Czech Republic, alcohol and tobacco barely moved last year, but lurched ahead this year in April and May, so that item is now 4.0% above a year ago. In neighboring Slovakia, the opposite development has occurred; alcohol and tobacco jumped 16.0% during 2003, but this year is only running 1.8% above its year-earlier level. A strong rise in post and telecommunications in the Czech Republic is also lifting the present price trend. Education expenses in both countries have accelerated this year.
One pattern that is common to both of these Central European nations is cheaper clothing costs. In the Czech Republic, these prices are down 3.9% from a year ago, following a 4.6% drop during 2003. In Slovakia, clothing costs are up just 0.1% from September 2003, but are slower than last year's overall rise of 2.0%. Prices of home furnishings are falling outright in both countries.
In recent months, observers have tended to interpret inflation developments largely by what is occurring in world energy markets. While energy costs are certainly important in every country, our discussion here highlights the significant roles of other quite diverse factors, which ought not to be forgotten in assessing inflation prospects.
| CPI, 12-Mo. % Changes | Sept 2004 | Aug 2004 | July 2004 | 2003 | 2002 | 2001 |
|---|---|---|---|---|---|---|
| Czech Republic | 3.0 | 3.4 | 3.2 | 1.0 | 0.6 | 4.1 |
| Slovakia | 6.6 | 7.2 | 8.5 | 9.2 | 3.4 | 6.4 |
| Lithuania | 3.2 | 2.3 | 1.9 | -1.3 | -1.0 | 2.0 |
| Brazil | 6.7 | 7.2 | 6.8 | 9.3 | 12.5 | 7.7 |
| Memo: US | -- | 2.7 | 3.0 | 1.9 | 2.4 | 1.6 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
More Economy in Brief
