ČNB: Inflation will drop in 2024, rates in 2H 2023

(CIANEWS) - During the spring and summer of 2023, year-on-year price growth will continue to slow visibly. In each of the following months, inflation will be more than 1 pp lower month-on-month. Thus, in 2H23, the rate of price growth will already be in single digits. As 2024 approaches, inflation will fall further by leaps and bounds. This stems from the ČNB's spring macroeconomic forecast, with inflation falling towards the 2% target at the monetary policy horizon, i.e. in 2Q and 3Q 2024. Both employment and unemployment will be roughly stagnant in 2023. Nominal wage growth will remain high throughout the year. Meanwhile, the volume of wages and salaries in real terms will only increase appreciably next year. The ČNB's interest rates will be able to start declining towards a policy-neutral level during 2H23. The still expansionary fiscal policy is having an inflationary effect.



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