You can also listen to the interview in the audio version.
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The president sent three new councilors to the future central bank governor Aleš Michl. From 1 July, Eva Zamrazilová, Karina Kubelková and the current CNB economist Jan Frait will sit on it.
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“Inflation control is always expensive, it won’t get any better. However, the fight against inflation is a mandate of the CNB. You also expect the doctor to do what is best for your health, “said Lubomír Lízal in the Agenda program. The basic repo rate is now at the level of 5.75%, which it reached after eight increases since last May.
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“But I do not expect an increase in force from the new composition of the board. In the best case, it will be as it was, the second extreme is that rates will not increase, “estimates Lubomír Lízal.
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Although Czech central bankers were one of the first in the EU to start raising rates after the pandemic, according to the economist, they are still behind the forecasts: “In the summer, rates should have been 8%. When they saw the prognosis, they had to make a clear cut. But they wanted to allow the actors to prepare for it. “
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Lubomír Lízal himself would raise rates immediately and radically: “I would see rates between 9 and 10% to make it fast. The higher the rate, the shorter the period. If you do it quickly, you will surprise the market. You slow down new loans and old loan agreements usually continue to apply, ”he explains.
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Lubomír Lízal
- economist, teaches at CTU and Anglo-American University
- 2011–2017 Member of the CNB Board
- From 2018 to 2022 he worked at Expobank CZ
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Cheap energy for everyone
Tomorrow, we will learn from Czech statisticians how fast prices rose in May. Analysts expect about 15% month-on-month inflation, driven mainly by rising energy prices. The government is therefore talking about a special cheaper energy tariff, but so far there is no specific proposal. And according to the latest reports from the government, it could not be until the end of August. It can be assumed that the CNB, which determines the level of interest rates, will also react to the level of inflation.
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According to Lízal, some companies are going bankrupt due to expensive gas, heat and electricity, some will change radically: “There will be a huge pressure on companies. It will be a change that may be as big as the transformation once was, “says the economist. Lízal would suggest this model: to give people, companies and authorities half of last year’s consumption at past prices, anything above this limit, then at current prices.
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According to him, this tariff system would motivate to reduce energy consumption: “Nobody can halve it, one-third or one-quarter of energy can be saved.”
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According to Lízal, the speed of help is more important than addressability. According to him, the state should contribute to cheaper energy, fall to whomever it falls and whatever it costs. “He who acts quickly acts twice. If they turn off the gas in Russia in the winter, we will need everything to work. If it will be the same as before, it will be expensive, but we have bought the certainty that our economy will not collapse, “he said.
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According to Lubomír Lízal, his proposal for a tariff motivates them to reduce energy consumption: “Nobody can halve it, savings of one third or one quarter can be achieved.”
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Agenda
A quarter of a first-hand business. Interviews with top leaders in Czech business, company founders, experts.
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Every weekday at SZ Business and in all podcast applications.
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