“Time wishes borrowers who have loans with low interest rates. High inflation helps them to devalue their liabilities. On the contrary, savers who leave their savings on ordinary banking products must reckon with the fact that inflation burns their savings to ashes, ”says BHS chief economist Štěpán Křeček.
From a year-on-year perspective, the inflation rate reached 5.8 percent in October this year, which was 0.9 percentage points more than in September. This is the highest year-on-year rise in prices since October 2008, when inflation reached 6.0 percent. The acceleration of price growth, which is the highest since January 2012, is also astonishing.
Inflation has once again moved away from its tolerance band. For this reason, further reactions from the Czech National Bank may come. It is likely to continue raising interest rates, which will slow down the Czech Republic’s economic growth. In addition, the monetary policy stance in our country will move even further away from the staging in the euro area.
Rising prices affect the vast majority of goods and services in the economy. Prices of goods in total increased by 5.4 percent and prices of services by 6.6 percent. The most problematic is the accelerating rise in rental prices, which can create serious social problems. At the same time, water and sewage and solid fuels are becoming more expensive. Higher electricity and natural gas prices have recently started to show in the statistics. They can be expected to jump sharply in the coming months.
A 26.8 percent increase in fuel prices can reduce people’s mobility. In addition, the prices of selected food, catering services, clothing and footwear are rising sharply. Sharp growth of 12.8 percent also occurs in the cost of owner-occupied housing. This is due to rising prices for building materials and labor. In addition, the lack of real estate in the market is pushing up rising prices for new apartments, which is reflected in the so-called imputed rents.
Ing. Štěpán Křeček, MBA
As Chief Economist at BH Securities as, he is responsible for creating macroeconomic and market analyzes. He also communicates with the public and the media. As a guest of television and radio programs, he often comments on current economic events. He is currently one of the most quoted Czech economists. He graduated from the Faculty of Economics at the University of Economics in Prague, where he continues to work and teach several subjects. From a professional point of view, it focuses on the analysis of the Czech economy, social systems and public budgets. He has written a number of professional papers on these topics. He enjoys sports, reading and listening to classical music.
BH Securities a.s.
BH Securities is a licensed securities trader and a member of the Prague Stock Exchange. The company was established in 1993, shortly after the establishment of the capital market in the Czech Republic.
Today, BHS is one of the most important non-bank securities dealers on the Czech capital market and has been providing individualized investment services without changing its name or approach for 25 years.
BHS offers a wide portfolio of investment services. In addition to trading on the capital markets, these are mainly asset management, individual investors’ funds, bond issues and trading, mutual funds and investment gold.
More information can be found at: www.investice.cz/ or to: www.bhs.cz.
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