Central Bank keeps issuing its own forecasts covering main macro-economic indicators like GDP, Inflation rate, Interest rates, main FX currency pairs estimates including the future global economy outlook etc.
The Year 2021
Monetary policy report 1Q/21: Inflation fell close to the CNB’s 2% target in 2021 Q1, mainly due to slower growth in food prices, which has been highly volatile recently. Annual GDP growth will temporarily shoot up to 6% in Q2, although mostly due to a low base. The Czech economy will not see truly robust and lasting growth until the anti-epidemic measures are relaxed more significantly during the second half of the year. Overall, Czech economic growth will only slightly exceed 1% owing to the adverse impacts of the pandemic in the first half of this year. Next year, GDP growth will pick up to more than 4%, due mainly to household consumption and investment reverting to steady, robust growth. The domestic economy will thus return to the pre-crisis level in late 2022 and the negative output gap will almost close. The recovery will also be aided by the CNB’s monetary policy, which has been accommodative for some time now.
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The Year 2020
CNB Inflation report 04/2020: Inflation will decrease into the tolerance band in late 2020 and early 2021 and return close to the CNB’s 2% target over the monetary policy horizon. The koruna will start to appreciate gradually again next year. The exchange rate forecast for 2020 Q4 is set at CZK 27.2 to the euro. Consistent with the forecast is stability of market interest rates initially, followed by a gradual rise in rates in 2021. The expected fading of the negative effects of the second wave of the pandemic in the quarters ahead, inflation stabilising subsequently close to the target, and a continued return of domestic and foreign economic activity towards pre-crisis levels will then allow a gradual increase in (normalisation of) interest rates to start during 2021.
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CNB Inflation report 03/2020: Consumer prices increased by 3.1% in 2020 Q2, driven mainly by buoyant core inflation and growth in food prices. GDP will decline by around 8% this year and return to growth next year. However, the economy will not reach the prepandemic level until the end of 2022. The decline in GDP this year will be due mainly to a drop in private investment. The exchange rate forecast for 2020 Q3 is set at CZK 26.7 to the euro. This thus reflects the appreciation recorded in late May caused by a change in global sentiment connected with the easing of the quarantine measures in Europe and the Czech Republic.
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CNB Inflation report 02/2020: Inflation will decline rapidly into the tolerance band and will be close to the CNB’s 2% target over the monetary policy horizon. Consumer prices increased by 3.6% in 2020 Q1, driven by buoyant core inflation and faster growth in food prices and administered prices. The Czech Republic has been hit significantly by the coronavirus pandemic, and the decline in the global and domestic economy will be exceptionally deep this year. The exchange rate forecast for 2020 Q2 is set at CZK 27.2 to the euro and thus reflects the sharp weakening of the koruna at the end of Q1 caused by the outbreak of the coronavirus pandemic.
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CNB Inflation report 01/2020: Inflation will remain above the upper boundary of the tolerance band this year and will converge towards the CNB’s 2% target over the monetary policy horizon. The growth of the Czech economy slowed but will gradually accelerate on the back of a recovery in external demand. By contrast, private investment is undergoing a downturn reflecting the slowdown in euro area economic growth. This factor will drop out during this year and total investment growth will turn positive again.
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the previous analysis are herewith attached:
