Czech Rep. Economic Outlook
June 7, 2022Revised national accounts data confirmed that year-on-year growth sped up in Q1, boosted by stronger capital spending and robust private consumption amid the easing of Covid-19 restrictions. Momentum is seemingly weakening in the second quarter, however. Spiking inflation in April and plummeting consumer sentiment in April and May suggest household spending is being weighed down. That said, the PMI readings for the first two months of Q2 signaled healthy expansions in the manufacturing sector, while rising business confidence in the same period hints at solid investment activity. Meanwhile, in mid-May the government unveiled a plan to beef up gas reserves amid the Ukraine war, while it is preparing a blueprint for businesses to save on energy consumption. Moreover, the cabinet recently approved a further hike in pensions to cushion retired people from the effects of surging inflation.
Czech Republic Economic GrowthThe pace of GDP growth should cool considerably this year, as the spillover effects of the war in Ukraine and rampant inflation weigh on activity. That said, the removal of Covid-19 restrictions, EU fund inflows, a tight labor market and accumulated savings should support growth. The prolongation of the Ukraine war and supply bottlenecks pose downside risks. FocusEconomics analysts see GDP expanding 2.0% in 2022, which is down 0.1 percentage points from last month’s forecast, and 2.9% in 2023.
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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
June 23, 2022
At its 22 June meeting, the Board of the Czech National Bank (CNB) decided to raise the two-week repo rate by 125 basis points, from 5.75% to 7.00%, marking the ninth consecutive hike and bringing the key rate to its highest level since 1999.
June 13, 2022
Consumer prices rose 1.76% from the previous month in May, decelerating slightly from April's 1.79% increase.
June 9, 2022
Industrial output dropped 3.8% year on year in working-day adjusted terms in April (March: -1.3% yoy).
June 3, 2022
The S&P Global Manufacturing Purchasing Managers' Index (PMI) dropped from April's 54.4 to 52.3 in May, the lowest value since October 2020.
June 2, 2022
GDP growth gathered pace to 4.8% in the first quarter, from 3.6% in the fourth quarter of last year.