Graph of Risks to the Inflation Projection (GRIP)
4th Situation Report 2019
The Monetary Department assesses the balance of risks to the Inflation Report II/2019 forecast as being balanced. In the GRIP simulation, the effect of the risks arising from the newly published data is broadly neutral overall. The weaker-than-forecasted koruna exchange rate in 2019 Q2 is an upside risk to inflation and interest rates. However, its effect is balanced out by a lower outlook for foreign producer prices and, to a lesser extent, also foreign interest rates. The forecast for the Czech economy is largely materialising. From the perspective of the GRIP simulation, the deviations of the domestic variables from the forecast are therefore negligible and offsetting each other.
Outside the GRIP simulation, the risks identified in Inflation Report II/2019 persist. These concern the impacts of protectionist measures in global trade and a more pronounced and potentially more protracted slowdown in economic growth in the euro area countries. The uncertainty regarding the duration and intensity of the impacts of the global factors affecting the koruna also persists.
