At the same
time, in comparison to the January estimates, the office expects higher average
inflation for this year at 12.3 %. So far this year, it has predicted a price
rise of 8.5 percent. Economic growth this year is expected to be driven by
government and private sector investment and consumption. At the same time,
however, household consumption will be enfeebled by a significant increase in
the cost of living, especially energy prices, and the CNB's (Czech National Bank)
tightening monetary policy.
For next year,
the government body expects economic growth to accelerate to 3.6 percent and
the average inflation rate to fall to 4.4 percent. However, the ministry said
the estimates are currently very uncertain, mainly because of the impact of the
war in Ukraine. "On the one hand, the influx of refugees from Ukraine
could ease labor market deficiency and weaken upward pressure on wages growth,
but potentially unsuccessful integration could pose a significant social
problem in the future," the ministry said. Year-on-year inflation is expected
to be in double digits for the rest of the year, peaking above 13 percent in
the second quarter. "Annual inflation should approach the CNB's two
percent inflation target only at the end of next year," the ministry said.
Source: E15.cz