CBA Monitor is an interactive and quick overview of information on the development of the economy and the banking sector in the Czech Republic, accompanied by comments from CBA experts.
Comment by Jaromír Šindel, Chief Economist of the CBA: Stronger sentiment in October suggests a return to stronger GDP growth for the end of this year after a probably slightly worse result in Q3. Higher price expectations may delay the return of core inflation to the target.
Comment by Jaromír Šindel, Chief Economist of the CBA: Lower food prices, a seasonal decline in holiday prices and a slight catch-up in education prices contributed to September's more moderate consumer price growth of 2.3%, which, however, reminds us of possible price catch-up in other segments next year as well (see Chart 4).
Comment by Jaromír Šindel, Chief Economist of the CBA: The continuation of the construction boom and the recovery in retail sales in August was dampened by the return of weaker industrial production, despite stronger exports. However, the positive sentiment in September suggests that the slowdown in GDP growth in Q3 may not be as pronounced as the July and August figures suggest.
Comment by Jaromír Šindel, Chief Economist of the CBA: The more pronounced slowdown in September consumer price growth to 2.3% year on year reflects a decline in most components of the consumer basket. There are three messages for the CNB that are likely to leave the CNB's communication unchanged, i.e. open to all interest rate possibilities.
Comment by Jaromír Šindel, Chief Economist of the CBA: The recovery in disposable income in Q2 was still dampened by fiscal policy, so it remained weaker compared to the increase in wages and property prices. Nevertheless, households managed to increase both consumption and their savings.
Comment by Jaromír Šindel, Chief Economist at the CBA: While the CNB unsurprisingly left interest rates unchanged with the two-week repo rate at 3.5%, the Board's statement on the monetary policy settings, however, was more surprising in its less hawkish tone, leaving open all possibilities for future monetary policy settings.
The CBA forecast is produced each quarter as a consensus forecast of selected domestic banks. A basic summary of the current CBA forecast in several figures and comments is outlined below, detailed information can be found in the
„CBA Forecast“ section.
GDP
0% yoy
year 2025 | 2026
The domestic economy is expected to accelerate to 2.1% this year and slow slightly to 2% y/y next year, but with a stronger momentum into next year. This comes after a 1.1% rise last year.
Unemployment
0%
year 2025 | 2026
We expect registered unemployment to rise slightly to 4.4% this year from 3.8% in 2024, with the expectation that it will stabilise at 4.4% next year, implying a slight improvement on current levels.
Average wages
0%
year 2025 | 2026
Growth in average nominal wages was expected to slow slightly to 6.2% from last year's 7.2% increase and further to 4.9% next year. This should result in real wage growth of 3.6% this year and 2.6% in 2026.
Inflation
0% yoy
year 2025 | 2026
Consumer prices are expected to rise by 2.5% year-on-year this year, almost repeating last year's performance of 2.4%, and we also expect only a further slight slowdown to 2.2% next year with slightly higher core inflation.
CNB 2-week repo rate
0%
end of 2025
According to the CBA's forecast panel, the CNB will commit to a cautious cut in the repo rate to 3.25% in 2026 after an unchanged level of 3.5% in the second half of this year. With this outlook, risks are skewed in both directions.
The Crown
0CZK/€
end of 2025
The interest rate differential remained supportive of a slight appreciation of the koruna compared with the previous forecast, also reflecting stronger prospects for export activity and easing uncertainty from trade wars.
Jaromír Šindel Chief Economist CBA
Jaromír Šindel is the Chief Economist of the Czech Banking Association, where he uses his extensive experience in the field of macroeconomic analysis and forecasting. Prior to that, he worked for more than 17 years as the Chief Economist at Citibank. In 1999 - 2004, he received a master’s degree from the University of Economics Prague with a major in economic policy and continued to focus on this field during his doctoral studies, which he completed in 2011.
During his time at Citibank (2007-2024), he worked mainly on macroeconomic analysis with a focus on economic trends in the Czech Republic, Slovakia and Slovenia. He prepared forecasts of economic developments and economic policy, including the impact on financial markets. Related to this, he also monitored global economic and political trends and their impact on the local economic situation.
