National Bank: inflation should rise to 10%

Last week, the Czech Statistics Agency released Czech inflation data for December. The last month of 2021 saw year-on-year inflation rates hit 6.6%, slightly above the Czech National Bank’s initial forecast of 5.6%.

Mr Král told Czech radio that the same factors that have pushed inflation up in recent months will start to push it down in the near future.

“The continued tightening of monetary policy by the Czech National Bank will also start to have an effect over time. This, in turn, should ensure a decline in underlying inflation reflected in the price of goods and services. We expect this to happen in the first half of 2023.”

Former Czech representative at the World Bank, Jana Matesová, told Czech radio that it is not yet clear whether the country is affected by a more international trend of inflation or by economic pressures. interior.

“A very powerful factor is the labor market, which shows that the Czech Republic has a specific sectoral structure, different from most contemporary developed countries.”

Among the national factors likely to have an impact, she cited unsatisfactory conditions for businesses, as well as inefficient state administration and legislation.

The Czech National Bank’s continued efforts to strengthen the krone have been criticized by the Czech Association of Exporters. The association’s vice president, Otto Daněk, told the Czech News Agency on Tuesday that the policy will cost exporters hundreds of billions of crowns a year. The Czech economy is highly dependent on exports, and members of the association are currently tackling other issues, such as pressure to raise wages, lack of resources as well as inflation itself and rising energy prices.

The Czech Koruna is currently at its highest value in a decade and analysts believe that it is mainly the increase in interest rates by the National Bank that is behind the rise in the value of the currency. .

Berta D. Wells