All analysis from category Macro comment
Macro comment
Wages in Q4: Two-year real decline
The last two years will not go down in the history of the Czech economy in the happiest way. Last year and the year before, living standards fell significantly as wages failed to keep pace with the dramatically rising prices of goods and services. The last straw in this negative series should be the development of wages at the end of last year. The average wage increased by 6.3 percent year-on-year to CZK 46,013 in the fourth quarter, but it fell by 1.2 percent in real terms.
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.
