All analysis from category Macro comment
Macro comment
CNB: Another significant reduction in interest rates
The CNB Banking Council decided to cut interest rates again by 50 basis points. The main two-week repo rate will drop to 5.25 percent. The return of inflation to the two percent inflation target has opened up room for rapid rate cuts. Nevertheless, the CNB is lagging behind in reducing interest rates. Interest rates roughly one percentage point lower would correspond to the current economic situation and the inflation forecast.
Macro comment
January-April budget: monthly deficit of CZK 48 billion in April
In the first four months of the year, the central government ran a deficit of CZK 153 billion. In the same period of the last year, the budget was in deficit of CZK 200 billion. The twelve-month deficit currently stands at CZK 242 billion.
Macro comment
PMI in April: a bad start to the second quarter
Business conditions in April were below the neutral 50-point mark indicating a decline in business activity for the twenty-third month in a row. Specifically, the manufacturing PMI index fell to 44.7 points in April from 46.2 points in March. So, not only is there no recovery in sight, but the decline is actually accelerating.
Macro comment
GDP in Q1 2024: Cautious recovery
Spring has arrived. Economic spring. The economy is slowly reviving. GDP increased by 0.5 per cent in Q1 compared with the previous quarter, and the economy's year-on-year performance rose by 0.4 per cent. This is certainly good news compared to the negative results last year, but in the long run, the growth of the economy is still very low. Moreover, despite the positive results at the beginning of the year, GDP is still 0.5 percent below the peak it reached at the end of 2019.
Macro comment
Consumer prices in March: Defiant rents and service prices
Price developments have moderated. Only rents and service prices are resisting and inflation in their prices is refusing to return to low levels. The consumer price index rose 0.1 percent month-on-month in March, with year-on-year inflation remaining at 2.0 percent.
