Competitiveness / Macroeconomic Indicators, Economic Growth

This section feature research, opinion and progress reports on how the Czech Republic compares to other EU countries economically. It includes analysis of international rankings such as the WEF and World Bank.

Spotlight issue

30th March 2020 / Competitiveness / Macroeconomic Indicators, Economic Growth

Central bank has cut interest rates by another 75bp

The Czech National Bank cut its key repo rate by a further 75bp at last week’s monetary policy meeting. While this was in line with market expectations, analysts expected a smaller decrease of 50bp. A poorer growth outlook for the Czech economy due to the COVID-19 pandemic remains the main reason for the loose monetary policy. The central bank also decided to decrease the counter cyclical capital buffer to 1% starting on 1 April and is prepared to buy government bonds in order to stabilise the financial sector. Once again, the bank declared its readiness to defend the koruna – which is weakening significantly – through the FX intervention. It did not cite a trigger value, but one was set internally. We forecast another rate cut of 50bp in the event of more severe economic impacts. As the cuts are state dependent, they can be implemented any time.
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19th March 2020 / Competitiveness / Macroeconomic Indicators, Economic Growth

ING’s latest CEE economic views and forecasts

As Covid-19 spreads across Europe causing more and more countries to take extraordinary measures, Central and Eastern Europe is no exception. Following some big market and central bank moves, our CEE specialists have updated our forecasts for growth and policy rates a
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17th March 2020 / Competitiveness / Macroeconomic Indicators, Economic Growth

CNB unexpectedly cuts interest rates

The Czech National Bank unexpectedly cut interest rates by 50bp at today’s meeting, with all seven board members voting in favour of the cut. We expect the key rate to remain unchanged for the rest of the year. However, the door remains open to other instruments. The governor admitted that the central bank is ready to react to any excessive fluctuations in the koruna. Although the CNB currently perceives no shortage of liquidity in the banking system, the board also, as a preventive measure, softened the rules of governing liquidity-providing operations.
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Members of the American Chamber of Commerce in the Czech Republic