Czech Republic's Local-Currency Issuer Default Ratings (IDR) was changed by Fitch rating agency to Positive from Stable and affirmed the IDRs at 'A+'. Czech banks are mostly foreign owned, well capitalised and liquid. Non-performing loan ratios are low (4.6%). Fitch's macro prudential indicator is '2', indicating that credit growth is more than five percentage points above its long-term trend. In response to rapid lending growth, the central bank has issued tighter macro prudential recommendations. The stock of credit is still relatively low, with households' indebtedness equivalent to 30% of GDP at end-2016, versus 50% on average in the EU. Fitch expects growth in credit to the private sector to decelerate in the coming years, reflecting tighter monetary conditions. Fitch assumes that growth in the Eurozone, Czech Republic's main economic partner, will be 2.0% in 2017, 1.8% in 2018 and 1.4% in 2019 after 1.8% in 2016.
Published by the team of CzechTrade foreign office in Chicago