The higher cost of money increases the risk for those who decide to pay that cost, and eliminates opportunity for those who decide not to. This will have a complex effect on the economy. Reducing the number of credit transactions will lower economic activity (especially for low margin opportunities in the market and for smaller companies without the assets to negotiate better terms from banks). That may contribute to lower inflation, but it will also influence in the economy in other ways- including making life very tough on small, local businesses.
Thank you to AmCham members for the insightful exchange on the Czech business environment nowadays.
31st March 2023
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