Publication of Graph of Risks to Inflation Projection
Starting with the Bank Board’s next monetary policy meeting, the Czech National Bank will begin publishing a Graph of Risks to the Inflation Projection (GRIP) along with a commentary. By publishing this graph, the CNB is further enhancing monetary policy communication and strengthening its position as one of the most transparent central banks in the world.
The GRIP will be published together with the minutes of the Bank Board’s monetary policy meetings at which no new forecast is made available. The CNB will start releasing the GRIP following the next monetary policy meeting, which is scheduled for 23 June. The publication of the GRIP and the minutes of this meeting is set for 1 July.
The GRIP is one of the starting points for the formulation of the Bank Board’s opinion on the balance of risks to the latest forecast and for its monetary policy decisions. The monetary policy decision-making of the Bank Board between two forecasts is thus based on an instrument for analysing the impact of new information which is stable over time and is consistent with core prediction model, thereby contributing to the predictability and credibility of monetary policy.
The GRIP is an instrument of the Monetary and Statistics Department and has been used since June 2004 to capture risks to the latest macroeconomic forecast by assessing the effect of newly available information on the outlook for inflation and interest rates. This assessment is conducted by means of simulations in the core prediction model into which individual pieces of new information are entered. The model response reveals deviations in the outlook for inflation and interest rates from the baseline scenario of the latest quarterly forecast.
Marek Petruš, CNB spokesman