Graph of Risks to the Inflation Projection (GRIP)
8th Situation Report 2019
The Monetary Department assesses the risks to the Inflation Report IV/2019 forecast as being broadly balanced overall. In the GRIP simulation, the risks to the current forecast arising from the newly published data are also broadly balanced overall and individually insignificant. Slightly higher expected foreign inflation and a slight upward revision of the outlook for foreign interest rates foster slightly higher inflation and domestic interest rates in the simulation. The somewhat stronger-than-forecasted koruna-euro exchange rate and slightly lower domestic interest rates so far in 2019 Q4 have the opposite effect. The domestic economy has a broadly neutral effect overall, with the forecasts for inflation, economic growth and the labour market largely materialising.
Outside the GRIP simulation, it can be simultaneously said that the anti-inflationary risk to the forecast described in Inflation Report IV/2019 relating to the economic situation abroad has recently moderated somewhat. The new data meanwhile indicate that the euro area economy is now probably close to the trough of the business cycle.
