Macroeconomic Forecast Czech Republic

Consumer prices failed to expand in y-o-y terms in the Czech Republic in September, continuing an unbroken run of y-o-y disinflation since March, following on from 0.2% y-o-y inflation in August. Food prices contracted 5.8% y-o-y, whilst transport prices decreased 5.6% y-o-y. Although some members of the Czech National Bank have stated their support for further interest rate cuts in an attempt to reverse the disinflationary trend, we currently are not forecasting further monetary easing before end-year, and as such expect CPI to only recover gradually. We are forecasting CPI to come in at 1.0% by end-year, rising to 2.3%

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