10th November 2015

Economic Policy: OECD Economic Outlook: Robust growth in Czech Rep in 2016, 2017. Rising domestic costs to push inflation to 2% target level in 2017.


OECD released their Economic Outlook on 9 November 2015, projecting a gradual strengthening of global growth in 2016 and 2017 to an annual 3.3% and 3.6% respectively. But a clear pick-up in activity requires a smooth rebalancing of activity in China and more robust investment in advanced economies...The recovery in the euro area is set to strengthen, helped by accommodative monetary policy, lower oil prices and an easing of the pace of budget tightening. Euro area activity is expected to grow by 1.8% in 2016 and 1.9% in 2017...The Economic Outlook also looks at the labour market and fiscal impact of the European refugee surge, and will release on Thursday, in advance of the G20 summit in Antalya, a policy note on this issue. In addition, the Outlook includes a scenario for the global impact of weaker demand growth in China and discusses a number of other issues including: rising US policy interest rates and spill-overs to emerging market economies; growth shortfalls in the euro area and Japan; revisions to potential output growth; and the impact of an increase in public investment in OECD economies...Read full press release. Read details in Czech here.

OECD forecast for the Czech Republic says that economic growth picked up strongly in 2015, driven by private demand and a boost from EU-financed public investment. Supportive financial conditions, growth in wages and profits and strengthening external demand are projected to support robust growth in 2016 and 2017. Rising domestic costs will push inflation to the 2% target level in 2017. Monetary policy remains appropriately expansionary to ensure that inflation returns to the target. But as soon as inflation is clearly increasing towards the target, the unconventional exchange rate policy – preventing appreciation against the euro – should be ended...Read more details on the Czech Republic.

View forecasts of the Czech central bank (in Czech and English). Read also the article EC expects moderate recovery to continue.

In their October 2015 Group of Twenty Imbalances and Growth report, the International Monetary Fund points out that "key risks facing the euro area are a protracted period of low growth and inflation, remaining political uncertainties in Greece, disruptive asset price shifts and financial market volatility, as well as a stronger than expected slowdown in major emerging markets.

Click also in OECD 50-year global scenario.

Members of the American Chamber of Commerce in the Czech Republic