Czech Economy is predicted to grow in 2024

Published: 16.02.2024 Related countries:  India India

The Czech economy could finally return to pre-pandemic levels this year. According to the forecast of the Czech Banking Association, economic growth should reach 1.2%. Real wage growth will also resume after several long years, but unemployment will rise slightly.

The performance of the Czech economy will rise this year due to the fact that Czech households will start spending more again and hence should contribute a large part of this growth. This will be helped by lower inflation and renewed wage growth reaching 6.5 percent in nominal terms,

According to economists, the Czech economy should also rely on increased exports. Although foreign economies, especially in the European Union, are unlikely to grow as fast as originally expected this year, the situation will improve.

Inflation is the big question for the coming months. Analysts agree that it will fall significantly year-on-year. However, there are disagreements about how significant this fall will be. Estimates suggest that inflation for 2024 should be 2.7 per cent.

In any case, it is clear that 2024 and 2025 should also see a reduction in the Czech National Bank's interest rates. Economists at banking houses more or less agree that the CNB's main interest rate should reach 4 per cent at the end of 2024.

However, the expected fall in interest rates will probably start to be reflected in the credit market. Economists note that mortgage activity in the Czech Republic has been recovering slightly since the end of last summer and this trend should accelerate in the coming months. The domestic real estate market is therefore likely to recover.


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