All analysis from category Macro comment
Macro comment
Industry in March: production drops again
Industrial production in March showed a year-on-year decline again after growth in February. Certain sectors have shown a decline in production for several months in a row, and a decrease was also recorded in the production of automobiles. On a calendar-adjusted basis, industrial production declined by 2.7 per cent year-on-year, while on a calendar- and seasonally-adjusted basis it fell by 1.6 per cent month-on-month.
Macro comment
Foreign trade in March: Solid exports and still weak domestic demand
Foreign trade in March was mainly influenced by three factors: rising oil prices, slowly recovering domestic demand and a solid export performance despite slow growth in Germany. However, the results were marred by the fact that March had three fewer working days. As a result, exports fell by 3.3 per cent year-on-year, while imports fell by 9.0 per cent. The trade balance posted a surplus of CZK 39.3 billion, more than double last year's figure.
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.
