Economic outlook, analysis and forecasts

Czech Republic - Economic forecast summary (November 2014)

 

The recovery is becoming more balanced as supportive financial conditions, government spending, rising confidence and stronger incomes are strengthening domestic demand in 2014 and 2015. The strength of domestic demand is offsetting the headwinds to exports from near-term weakness in export markets. As exports also recover, economic slack will diminish and push inflation to 2% by 2016.

Monetary policy is concentrated on preventing deflation, but by 2016 policy will likely need to refocus on pre-empting rising inflation. This will involve allowing the exchange rate to float freely and raising the policy rate again. For a more sustainable recovery, the authorities should continue implementing measures to strengthen competition.

Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.

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