Producer prices gradually increase in CEE

This week, we will see flash estimates of Augusts inflation in several CEE countries. Namely, Croatia, Poland, Slovenia and Slovakia (within HICP flash estimate) have such releases scheduled at the end of the week. In all of these countries we would expect similar headline inflation figures in August to those seen in July. Today, however, we look at the producer prices development in CEE. Producer prices bottomed out at the beginning of the year and since February they have been gradually increasing. Rise of production costs suggest an upward pressure on the headline inflation in the coming months. After the period of extraordinarily high inflation, however, there may be limited space of further transmission of higher costs on consumers. If the increase in costs is minor it may be largely absorbed by producers as well.