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Czech households are increasing their willingness to spend more due to falling unemployment and rebounding consumer sentiment. The retail trade adjusted for car sales is expected to have grown 8.1% y/y in November, while car sales is likely to have increased at 14.8% y/y. However, the growth in retail sales has not been strong enough to greatly accelerate inflation.
"Although we expect the yoy price increase to accelerate from 0.1% to 0.4%, the statistical base effect and seasonal factors are to blame", says Societe Generale.
Core prices are expected to have been stagnant for the third consecutive month, whereas fuel prices have declined for the fifth consecutive month. Administrative prices are not expected to have been changed considerably. They are likely to fall slightly during the beginning of 2016 when energy prices are expected to also decrease slightly.
