Czech consumer prices fell by an average of 0.3% mom in December, as in November, while the annual growth rate remained unchanged at 2.1%. Final inflation data thus confirmed the CZSO’s preliminary estimate. Consumer price developments were broadly in line with our forecasts, of a 0.3% mom decline, with only slightly weaker annual growth of 2.0% in December. However, December’s headline inflation was lower than the market consensus and the CNB forecast (both 2.3% yoy). Inflation was already 0.1pp below the CNB estimate in November, and this gap widened further in December.

Czech consumer prices fell by an average of 0.3% mom in December, as in November, while the annual growth rate remained unchanged at 2.1%. Final inflation data thus confirmed the CZSO’s preliminary estimate. Consumer price developments were broadly in line with our forecasts, of a 0.3% mom decline, with only slightly weaker annual growth of 2.0% in December. However, December’s headline inflation was lower than the market consensus and the CNB forecast (both 2.3% yoy). Inflation was already 0.1pp below the CNB estimate in November, and this gap widened further in December.

Food prices declined significantly towards the end of last year. In December, both food and non-alcoholic beverage prices and alcohol and tobacco prices fell by 1.1% mom. Consequently, year-on-year growth for the entire food price category slowed from 2.1% to 1.8%. This was in line with our estimate. Similar falls in food prices were observed in December 2023 and 2024, suggesting a potential seasonal effect related to pre-Christmas sales. The December figures also confirmed the downward trend in food prices observed for much of the second half of last year. This trend may be driven by lower energy and fuel prices, which contribute to lower production and transport costs. The stronger koruna, which makes imported goods cheaper, is also a factor, as is last year’s favourable domestic agricultural harvest. In line with this, food and agricultural producers have simultaneously reduced their prices.

Fuel prices were also lower. Fuel prices fell by 1.9% mom in December – a stronger decline than leading indicators had suggested. The year-on-year decline accelerated from 2.6% to 4.9%. However, the price of crude oil fell by an even sharper 3% mom in December, while the koruna strengthened by 1.2% mom against the US dollar. This widened the gap between fuel prices and the price of crude oil. The decline in fuel prices could therefore continue in the coming months. Geopolitical factors are a source of uncertainty – primarily conflicts between the US and Venezuela / Iran. Regulated prices stagnated in December, with an ongoing gradual decline in household energy prices (down 0.2% mom). Annual growth in regulated prices increased only slightly, from 0.1% to a still-weak 0.4% in December.

Core inflation accelerated from 2.6% to 2.8% yoy in December. Following a decline in November, it returned to the level seen between August and October 2025. We had expected stagnation at 2.6% yoy. By contrast, the CNB’s November forecast estimated higher core inflation than was actually observed, at 2.9% yoy. The acceleration in December was influenced by an increase in the annual growth of both imputed rents (from 4.8% to 5.0% yoy) and paid rents (from 6.2% to 6.4% yoy). The fading effect of Black Friday-related November discounts on selected goods (especially electronics), may also have played a role. According to our calculations, core inflation excluding rents also rose, returning to 2.0% yoy after 1.8% in November. Nevertheless, it remained at the CNB’s 2% target. Overall goods price growth (including food and energy) remained subdued at +0.4%, while services price growth accelerated from 4.6% to 4.8% yoy. We believe that persistently high core and services inflation, together with the expected inflationary effects of a more expansionary fiscal policy, will prompt the CNB to maintain a cautious stance on further rate cuts. However, the first months of this year, when most retailers adjust their prices, should reveal more.

After averaging 2.5% in 2025, we expect inflation to fall to around 1.5% this year. The transfer of renewable energy payments from households to the state since the beginning of January should have a significant impact. According to the Energy Regulatory Office, this will result in regulated electricity prices for small consumers decreasing by 15.1%. We anticipate that this will reduce headline inflation by around 0.3pp in 2026. This is likely to be accompanied by a further decline in market electricity and gas prices. Lower energy prices could then have a positive impact on the weaker dynamics of other prices in the economy.

Colt CZ has announced the completion of its acquisition of a 51% stake in Synthesia Nitrocellulose (SNC). The transaction also includes the purchase of a 51% stake in Synthesia Power (SP). Colt CZ may acquire the remaining 49% under pre-agreed terms within the next few years. The acquisition was announced around the middle of last year.

The total acquisition price is CZK10b, consisting of CZK5.5bn in cash and 6,174,214 new Colt shares at a price of CZK732 (180-day VWAP) per share. Kaprain, the selling company, gained a 9.86% stake in Colt, becoming its third-largest shareholder.

SNC should significantly improve Colt's financial results. SNC's EBITDA of approximately CZK2.5bn accounts for 53% of Colt's 2025 target. The transaction multiple is 8.2x EV/EBITDA. Compared to Colt's multiple of about 11x EV/EBITDA, the transaction price is favourable.

Following the acquisition of Sellier&Bellot, the purchase of Synthesia Nitrocellulose is another significant transaction that will improve Colt's financial performance and strengthen its vertical integration. SNC is a key supplier for Colt's ammunition business.

Colt CZ has announced the completion of its acquisition of a 51% stake in Synthesia Nitrocellulose (SNC). The transaction also includes the purchase of a 51% stake in Synthesia Power (SP). Colt CZ may acquire the remaining 49% under pre-agreed terms within the next few years. The acquisition was announced around the middle of last year.

The total acquisition price is CZK10b, consisting of CZK5.5bn in cash and 6,174,214 new Colt shares at a price of CZK732 (180-day VWAP) per share. Kaprain, the selling company, gained a 9.86% stake in Colt, becoming its third-largest shareholder.

SNC should significantly improve Colt's financial results. SNC's EBITDA of approximately CZK2.5bn accounts for 53% of Colt's 2025 target. The transaction multiple is 8.2x EV/EBITDA. Compared to Colt's multiple of about 11x EV/EBITDA, the transaction price is favourable.

Following the acquisition of Sellier&Bellot, the purchase of Synthesia Nitrocellulose is another significant transaction that will improve Colt's financial performance and strengthen its vertical integration. SNC is a key supplier for Colt's ammunition business.