Government advisor: CNB resigns on fighting inflation

(CIANEWS) - The Czech National Bank should not stop raising interest rates and thus resign itself to fighting inflation. David Marek, a member of the National Economic Council of the Government (NERV) and advisor to the President, said this on Czech Television's discussion program Otázky Václava Moravce. If the base rate were set at 8% instead of 7%, he said, the Czech Republic would avoid a wage-inflation spiral. The central bank is not supposed to look to the government and not primarily to growth. Jan Švejnar, an economist and director of the IDEA CERGE-EI centre, expressed partial disagreement, saying that wages are rising with a lag compared to prices and company profits. A decision not to raise wages would jeopardise social peace at a time when society is polarising, he said.



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