Monetary Policy Reports

The Monetary Policy Report carries the CNB’s new forecast four times a year. In addition to outlooks for the domestic and foreign economies, it presents the decisions made by the CNB Bank Board in the context of considerations of the risks and uncertainties of the forecast.

Summer 2023
Following the discussion of the Summer 2023 Monetary Policy Report, the Bank Board kept interest rates unchanged. The baseline scenario of the summer forecast implies a decline in market interest rates over the entire outlook. Inflation will continue to fall and this downward trend will halt only temporarily in the autumn due to the statistical effect of last year’s energy savings tariff. After it fades out, inflation will fall sharply to close to the 2% inflation target at the start of next year. Domestic economic activity will be broadly flat this year and return to appreciable growth next year. Details.

In 1998, the Czech National Bank switched to direct inflation targeting. In the inflation targeting regime, the central bank’s communication with the public plays a significant role. One of the core elements of this communication is the publishing of quarterly Monetary Policy Reports, which, in 2021, replaced the previous Inflation Reports.

The economic forecast prepared regularly by the CNB’s Monetary Department is central to deciding the current interest rate settings. The first section of the Monetary Policy Report contains the forecast for economic developments abroad, as they have a considerable impact on the Czech economy. The second section contains the forecast for the domestic real economy and labour market. The third section pays attention to inflation. The final section describes the Bank's latest monetary policy decision in the context of monetary developments and the risks and uncertainties of future economic developments.

The forecast is the key, but not the only, input to the Bank Board’s decision-making. At its meetings during the quarter, the Bank Board discusses the current forecast and the balance of risks and uncertainties surrounding it. The arrival of new information since the forecast was drawn up and the possibility of asymmetric assessment of the risks of the forecast and divergent views of some board members on the development of the external environment or the linkages between the various indicators within the Czech economy mean that the Bank Board’s final decision need not correspond to the message of the forecast. Information on the Bank Board’s discussions and on the reasons for its monetary policy measures is given in the minutes of the Bank Board meetings.