For inflation the forecast predicts that it will fall to 2.3 percent this year and remain similar for the following year. This is a notable decrease from earlier estimates, which predicted an average inflation rate of 2.7 percent for the year. Supporting these projections, the Czech National Bank’s (CNB) current forecast also aligns with an economic growth of 1.4 percent for this year. The recent shift in international developments towards a slightly more optimistic direction has cautiously improved the outlook for foreign demand and has allowed for an improvement in domestic economic growth, as stated by CBA analyst Jakub Seidler.

However, the Czech economy’s growth remains fragile, particularly due to developments in Germany and China. The main driver is expected to be domestic demand. Household consumption, which has seen a decrease in the past two years, is expected to start growing again this year, with an increase of 2.5 percent. After a two-year slump, the CBA expects a nearly four percent increase in real wages.

Source: Czech Daily

Prepared by the team of foreign offices CzechTrade Osaka and Tokyo