Czech Economic Outlook: Economy revving up
30.07.2021Company: Amcham
The economy is rising sharply Growth has so far been driven by high inventories this year, but investment in fixed capital and household consumption should now take the lead. We expect the economy to grow by 4.2% this year and 5.3% next year.
Inflation should have reached a peak Core inflation has been running faster since onset of the pandemic and will probably take time to slow down. We estimate inflation to reach 2.8% this year and slow down to 2.4% next year.
CNB likely to continue to raise interest rates With the economy starting to recover and inflation staying above the 2% target, we expect further hikes. The repo rate is likely to rise from 0.5% to 1.25% by year-end, and to above 2% by end-2022.
A complicated path to higher interest rates and government bond yields Short-term declines look set to continue, but an upward trend is inevitable, in our view.
Global developments limit the potential of the koruna We expect the CZK to continue to appreciate, but further fluctuations are likely. Compared to the previous forecast, we expect a more moderate pace of appreciation for the koruna.
Jan Vejmělek,Jana Steckerová,František Táborský,Michal Brožka,Martin Gürtler
Economic and Strategy Research
Komerční banka
trading.kb.cz
Tags: Economics | Finance |
