Macroeconomic Forecast Czech Republic

Consumer price inflation (CPI) remains muted in the Czech Republic, coming in at a mere 1.6% year-on-year (y-o-y) in April, down from 1.7% y-o-y in March. The largest increase in the index was in the 'food' subcomponent, which rose by 3.8% y-o-y. In contrast, most other subcomponents registered a decline in yearly terms. While demand-pull inflationary pressures are subdued at the moment, as consumer spending remains restrained, we expect that inflation will pick up towards the end of the year in line with the economic recovery and forecast CPI to average 2.4% this year.

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