In the media, you will very often come across the word inflation. Many people do not know exactly what they mean by inflation and how to calculate it. Inflation can be defined as a recurrent rise in the prices of most goods and services in an economy. The Czech National Bank regularly monitors the level of inflation. It also tries to use its instruments to keep inflation within a certain ‘level’. The opposite of inflation is deflation, i.e. a general decline in the price level.
Inflation in daily life
More often than inflation, ordinary people talk about rising prices. This can be seen, for example, in food, housing, fuel prices and many other products and services. There can be a number of reasons for price increases – for example, rising labour costs, the price of raw materials and energy, a limited supply of a particular product, an increase in taxes or the imposition of tariffs on imported raw materials or finished products.
Consumer price index
The Czech Statistical Office measures inflation in the Czech Republic. The growth in the consumer price level is measured by the so-called consumer price index. It expresses the price level as the average price level of several hundred products and services included in the consumer basket.