Czech inflation and unemployment up in July

Business Materials 8 August 2008 21:43 (UTC +04:00)

The Czech Republic's inflation rate and unemployment were up in July, according to government data released Friday, dpa reported.

Inflation accelerated to 6.9 per cent year-on-year in July, from 6.7 per cent year-on-year in June, mainly due to an increase in housing and tobacco prices, the Czech Statistical Office said.

The inflation rate reached a nine-year peak of 7.5 per cent in January, a hike caused both by a set of government policies and growing food and energy prices.

Consumer prices in July grew 0.5 per cent compared to June mainly due to higher prices for housing, holidays and tobacco, the statisticians said.

The Czech central bank however, considering rising consumer prices a lesser threat to the Czech economy than the strong Czech koruna, cut borrowing costs Thursday.

Analysts say the firming Czech currency accompanied by labour shortages could soon slow down the economy in the former Soviet satellite, which had boomed in recent years following an influx of foreign investment.

The country's unemployment rate, based on a number of jobseekers registered with state labour authorities, rose to 5.3 per cent in July, up from a 10-year low of 5 per cent first recorded in May, the Labour and Social Affairs Ministry said.