All analysis from category Macro comment

Macro comment

State Budget for January and February: Slowdown in Expenditure Growth

In the first two months of this year, the central government ran a deficit of CZK 102.5 billion. In the same period last year, the budget was in deficit of CZK 119.7 billion. The twelve-month deficit currently stands at CZK 271.2 billion.

Macro comment

PMI in February: pace of decline in manufacturing slows

Business conditions were below the neutral 50-point mark indicating a decline in business activity for the twenty-first month in a row in February.

Macro comment

Consumer prices in January: Significant drop at the beginning of the year

Inflation measured by the consumer price index has returned to the CNB's tolerance band for the first time since 2021. The chapter of the unprecedented rise in the price level over the past two years can therefore be declared closed, but the consequences of the inflationary wave will be visible for many months to come.

Macro comment

CNB: 50 bps rate cut

The CNB`s Board decided to cut rates by 50 basis points. The main two-week repo rate is currently at 6.25%. This is the right decision in a situation where strong inflationary pressures have eased but, on the contrary, the real economy is slowing down. Although the economy narrowly avoided a recession at the end of last year, we are not expecting any rapid growth. In this environment, it is logical not to have an overly restrictive monetary policy. After all, the autumn forecast already envisaged a sharp cut in rates at the start of this year and the new forecast will be no different.

Macro comment

Unemployment in January: slight deterioration in the labour market

The share of unemployed in the 15-64 population increased by 0.3 percentage point to 4.0% in January. This is an increase of 0.1 percentage point year-on-year. 296 thousand jobseekers were registered at the labour offices, 16 thousand more than in December. The increase in unemployment in January is due to both seasonal factors (seasonal lay-offs in agriculture or construction) and non-seasonal factors, see the year-on-year increase in unemployment. On a seasonally adjusted basis, we estimate that the unemployment rate rose by 0.1 percentage point to 3.7%.