CBA Monitor
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.
Updates
Comment by Jaromír Šindel, Chief Economist of the CBA: Retail and services sales disappointed in September despite solid wage growth, which was confirmed by September industrial wages. A gradual but steady rise in unemployment is likely to be in evidence here. Thus, the stronger GDP growth in Q3 was helped by September's industrial production, which complemented the strong construction output of the previous months. Given sentiment, things might not be different in October.
Comment by Jaromír Šindel, Chief Economist of the CBA: The CNB is waiting for a new impulse. The CNB is waiting for the new government to announce its plans, both from the data and from future analysis of the new government's upcoming plans. The CNB's own outlook, with more moderate consumer price growth at the end of the year and a stronger economy in real terms in Q3, opens up the possibility of more hawkish communication in the rest of the year. But I believe the CNB will wait to reassess its communication until the contours of the new government's policy are clearer.
Comment by Jaromír Šindel, Chief Economist of the CBA: The return of consumer price inflation to 2.5% in October will keep the CNB vigilant. Although this was due to higher food prices, the current core inflation rate remains slightly above the inflation target, which will probably be evident next spring. Although selected plans of the new coalition will help to further tame price rises, others are more likely to maintain an inflationary undercurrent in the economy.
Commentary by Miroslav Zámečník, Chief Advisor of the Czech Banking Association
Comment by Jaromír Šindel, Chief Economist of the CBA: The stronger koruna, lower inflation, and the return of productivity growth give the central bank some relief, allowing it to monitor how wages and the post-election fiscal plans—often pulling in opposite directions—will play out.
Comment by Jaromír Šindel, Chief Economist of the CBA: The return to stronger economic growth of 0.7% quarter-on-quarter in Q3 was a surprise, confirming the indications of stronger confidence in September. At the same time, stagnant employment added a welcome return to stronger productivity, which may partially dampen the hawkish impulse of stronger GDP for the CNB. The CNB will most likely leave interest rates unchanged at 3.5%, not only at the November meeting, but GDP details may set a more distinct tone to its communication later in November.
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.
The volume of new mortgages has reached CZK 235 billion since the beginning of the year
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).
Last CBA forecast
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
0
CZK/€
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.