Headline inflation is expected to drop below the current 3% inflation target in 2009 and to hit the new target of 2%, set for 2010, at the end of next year, said Miroslav Singer, a vice governor of the Czech National Bank.

Singer said that the central bank expected that regulated prices would fall. Food and fuel price inflation would also slump, though disinflationary pressures from the koruna's appreciation would weaken following the recent reversal of this trend. He added that wage growth