All analysis from category Macro comment
Macro comment
Trade balance in September: slight deficit reduction
The balance of foreign trade ended in a deficit of CZK 13.9 billion in September, a year-on-year improvement of CZK 2.6 billion. The twelve-month balance currently stands at CZK -174 billion, down slightly from August. Exports were strong with growth of 25.8% y-o-y (however, this is due to the low comparative base from last year), while imports grew by 23.8%.
Macro comment
Industry in September: stagnation with negative outlook
September industrial data show an expected gradual decline in production. This is partly held back by the automotive sector, which is growing thanks to the low comparative base of last year. The energy crisis will be fully apparent in the hard numbers when this statistical effect wears off. Industrial production increased 8.3 percent year-over-year after adjusting for calendar effects, but fell 0.2 percent month-over-month after both calendar and seasonal adjustments. The value of new orders increased by 21.9 per cent, but this is also influenced by the low comparison base of the previous year. The leading indicator of business conditions, the PMI, is already showing declining demand at home and abroad.
Macro comment
CNB: Waiting for a recession with stable rates
Nobody probably expected the change in interest rates in November this year. In line with these expectations, the CNB left interest rates unchanged, with the main repo rate remaining at 7.0%. At the same time, interventions to maintain the exchange rate of the koruna will continue. The CNB's forecast has changed, unfortunately for the worse.
Macro comment
State budget for October: on the way to a full-year deficit of around CZK 370 billion
In January-October, the central government ran a deficit of CZK 287 billion, while in October alone the deficit was CZK 16 billion. The twelve-month balance currently stands at CZK 371 billion. Tax revenue and expenditure are basically on track. 86% of the full-year plan has been collected, while around 84% of the full-year plan has been spent, and we are currently 83% of the way through the year. EU revenue is lagging behind, with only 43% of the full year plan collected so far.
Macro comment
PMI in October: continued deterioration in business conditions
Looking at the development of business conditions, it seems that they have not yet found an imaginary bottom. The continuous decline has been going on since last December and the index itself is at its lowest level since the start of the COVID-19 pandemic. The reason is still the same, namely rising inflation combined with falling demand at home and abroad. The seasonally-adjusted manufacturing purchasing managers' index fell to 41.7 points in October from 44.7 points in September.
