Czech Rep. Economic Outlook
October 5, 2021The economy rebounded in annual terms in Q2, underpinned by easing Covid-19 restrictions and supportive fiscal and monetary policy stances, as well as a favorable base effect. The recovery likely carried over into the third quarter: Consumer confidence strengthened on average in Q3, which, coupled with a recovering labor market, hints at healthy household spending. Moreover, the manufacturing PMI remained firmly in expansionary territory in the period, although business sentiment weakened somewhat. In politics, Prime Minister Andrej Babis’ ANO-led coalition is leading the polls by a narrow margin ahead of the 8–9 October elections, followed by the center-right SPOLU alliance and the Pirate Party-led coalition. As no single group is likely to win an outright majority, uncertainty looms over possible post-election alliances and tough negotiations to form a new government.
Czech Republic Economic GrowthThe economy should expand at a solid pace this year and next, as the Covid-19 pandemic subsides, pent-up demand is unleashed and an expansionary fiscal policiy support activity. Additionally, EU recovery funding will provide a further boost. However, the outlook is clouded by ongoing global supply shortages and pandemic-related uncertainty. FocusEconomics analysts see GDP expanding 3.6% in 2021 and 4.7% in 2022, which is down 0.1 percentage points from last month’s forecast.
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Czech Republic Facts
|Bond Yield||1.64||-1.85 %||Dec 31|
|Exchange Rate||22.76||-0.66 %||Dec 30|
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Czech Republic Economic News
October 15, 2021
Consumer prices rose 0.17% from the previous month in September, following August’s 0.69% rise.
October 7, 2021
Industrial production declined 1.4% year-on-year in working-day adjusted terms in August (July: +6.8% yoy).
October 3, 2021
At its 30 September meeting, the Board of the Czech National Bank (CNB) decided to raise the two-week repo rate by 75 basis points to 1.50%, marking the third consecutive hike and surprising markets on the upside.
October 1, 2021
The IHS Markit Manufacturing Purchasing Managers' Index (PMI) dropped to 58.0 in September from August's 61.0.
September 24, 2021
The economic sentiment indicator, published by the Czech Statistical Office (CSO), fell to 96.2 in September from 98.6 in August, marking the worst print since April. The business confidence index dropped in September, coming in at 95.3, from August’s 97.1 reading.