Research Detail
| 2022/09/13 / Erste Group Research |
Temporary worsening of the Czech economy In the rest of this year, the development of the Czech economy will probably worsen, due to both lower domestic as well as foreign demand. In this respect, we expect a mild recession, but both-sided uncertainty remains high, due to external factors. Although a slight increase in the unemployment rate is expected, the labor market worsening during this year goes mainly through decreasing real wages affected by high inflation. Next year, economic recovery should take place, which will also be supported by a gradual reduction in inflation, improved foreign demand and lowering the CNB rates. We expect the CNB to keep rates stable until the beginning of the next year. However, the probability of an earlier cut (e.g. November) has been increasing, mainly due to the recent shift of the MP horizon, the lower than expected August inflation figure, price caps on electricity and gas and the expected economic worsening. The koruna has been relatively stable, and we expect such a development to continue in the coming months. The koruna could start appreciating again in the next year, although its pace will probably be mild, in our view. |
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General information
| Author | Erste Group Research |
| Date | 2022/09/13 |
| Language |  |
| Product name | CEE Country Macro Outlook |
| Topic in focus | FX, Macro/ Fixed income |
| Economy in focus | Czech Republic |
| Currency in focus | Czech Koruna |
| Sector in focus | - |
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