CNB forecast – Spring 2022

This forecast was published on 5 May 2022 and (with some exceptions) is based on the data available as of 22 April 2022. A detailed description of the current CNB forecast is available in the Monetary Policy Report – Spring 2022 and in the presentation for the CNB meeting with analysts.

  2022 2023
Headline inflation (%) 13.1 4.1
Monetary policy-relevant inflation (%) 12.7 3.9
Gross domestic product (annual changes in %) 0.8 3.6
Interest rates 3M PRIBOR (%) 7.0 5.1
Exchange rate (CZK/EUR) 24.2 24.3

Note: Forecast in bold

Headline inflation (in %)

Headline inflation in 2022 Q2 and at the monetary policy horizon (in %)
April 2022 May 2022 June 2022 2023 Q2 2023 Q3
13.8 14.9 15.0 3.8 2.7

Inflation will rise further in 2022 Q2, reaching almost 15%, with all its components contributing to the increase. Thereafter, inflation will start to fall, returning to single-digit levels at the beginning of next year. Inflation will decline further close to the 2% target in the course of 2023.

Forecast – Headline inflation – Spring 2022 – graph 1

Monetary policy-relevant inflation (in %)

Monetary policy-relevant inflation in 2022 Q2 and at the monetary policy horizon (in %)
April 2022 May 2022 June 2022 2023 Q2 2023 Q3
13.5 14.6 14.8 3.6 2.4

Monetary policy-relevant inflation will be below headline inflation over the entire forecast horizon. Monetary policy-relevant inflation will fall close to the inflation target at the end of the monetary policy horizon, due in part to the previous tightening of monetary conditions.

Forecast – Monetary policy-relevant inflation – Spring 2022 – graph 2

Gross domestic product (annual changes in %)

GDP growth will slow considerably this year, with economic activity even contracting slightly year on year in the second half of 2022. This will be due largely to subdued household consumption, fixed investment and exports. Economic growth will recover next year.

Forecast – Gross domestic product – Spring 2022 – graph 3

Interest rates 3M PRIBOR (in %)

Consistent with the baseline scenario of the spring forecast is a further sharp rise in market interest rates until mid-2022, followed by a gradual decline from autumn 2022. In the baseline scenario, the central bank sets interest rates in order to achieve the 2% target at the standard monetary policy horizon.

Forecast – Interest rates (3M PRIBOR) – Spring 2022 – graph 4

Exchange rate (CZK/EUR)

The CZK/EUR exchange rate will initially appreciate slightly and then will be broadly stable.

Forecast – Exchange rate – Spring 2022 – graph 5