According to a report released on Thursday by the central bank, the higher than usual inflation experienced in January was due to the widespread increase in taxes at the end of the year. The annual inflation rate increased by a significant 1.66 percentage points in January to reach 8.19 percent and also hit 1.85 percent on a monthly basis. The bank stated that a further increase in energy prices also had a significant effect on January inflation rates but stated that this was in line with medium-term goals.
Regarding the increase in the price of tobacco products, the central bank noted that the 22.04 percent increase in prices, along with the low base of 2009, had an above-average effect on the consumer price index (CPI). The bank added that these two effects would also be reflected in the February inflation figures although it predicted that core inflation rates would increase in line with predictions.
The central bank revealed that in January inflation was most significant in energy prices, increasing by 3.94 percent, and for other products excluding food and energy, which includes tobacco products (2.04 percent). The bank predicts that tax measures on fuel, alcohol and tobacco products will add 1.5 points to inflation in 2010, with a total inflation rate of between 5.5 and 8.3 percent in 2010.
