Graph of Risks to the Inflation Projection (GRIP)
2nd Situation Report 2013
Although the deviations of the individual points from the intersection of the axes are small, the model simulation results captured in the GRIP together represent slightly anti-inflationary risks to the forecast published in Inflation Report I/2013, i.e. risks tilted to a need for somewhat easier monetary conditions compared to the forecast. This is due to an accumulation of small anti-inflationary deviations in the new domestic data on inflation and economic activity and in the new outlooks for external environment. Compared to the forecast, the exchange rate and domestic interest rates have a neutral effect.
Outside the GRIP simulation the uncertainties associated with the resolution of the euro area debt crisis are growing again. These uncertainties could lead to more subdued domestic economic activity and pressures for a weaker koruna. According to the Monetary and Statistics Department, the overall balance of risks to the Inflation Report I/2013 forecast is slightly anti-inflationary, i.e. tilted to a need for slightly easier monetary conditions.
