The Czech National Bank's inflation report for Q3 1998

The decline in year-on-year inflation was halted in Q3 1999. After a consid erable drop in the previous period, inflation gradually stabilised at its l owest level since 1991, the beginning of the country's economic transformat ion. Net inflation continued to be determined largely by food prices. The e conomy livened up somewhat in Q2 1999, fostered in particular by an improve ment in net exports and by growth in household consumption. The current macroeconomic framework is marked by the anti-inflationary effe ct of the demand side and by the revival of some cost-push inflationary fac tors. The medium-term inflation trend will be affected by growth in import prices linked with the upsurge of commodity prices on global markets. Looki ng forward, inflation will rise somewhat over the Q3 level. The mid-value o f the net inflation forecast is moderately below the lower limit of the inf lation target for the end of 2000.