“We will experience inflation rates that we have not experienced in the last 20 years. The year 2022 will probably be a year of preciousness. Our monetary policy is trying to get citizens to save more and spend less. If they have to work harder, I would leave it to them, “Mora told SZ Business.
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The latest central bank forecast projected seven percent inflation early in the year. According to Mora, it will be worse: “I would estimate it at nine percent,” Mora said.
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Now, in January, traders are traditionally setting new prices. According to the vice-governor, he will increase them more vigorously this year than before. “The revaluation may be more pronounced than in the past. In the end, inflation may not be as much as nine percent, but we can get to double-digit inflation, around ten percent. This cannot be ruled out, “said the CNB Vice Governor.
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It will be better in the spring
It will make everything more expensive. From food to energy, whose prices have not yet fully penetrated inflation. According to Mora, prices will culminate this quarter.
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“We will experience high inflation numbers in January, February and March.” So we will see them in the figures published in February, March and April. The CZSO today published the value of inflation for December, prices rose by 6.6 percent. Exactly as analysts estimated.
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And when will the increase in price end? According to Mark Mora in the spring: “April, May, June, there should be a slowdown. A significant slowdown should take place in the second half of the year, but the worst is yet to come, he estimates.
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We will slow down with rates soon
The CNB is trying to mitigate the high rise in prices by raising interest rates. Through a series of drastic steps, it drove the key interest rate up to 3.75 percent. And the rate that makes commercial loans and mortgages more expensive will continue to rise.
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The next meeting, when the CNB will decide on rates, will take place in early February, then in late March and in May.
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“One or two steps will have to be more significant. I would think it will be more than Thursday in February. From May, it will be just a process of fine tuning. I don’t think the pace will continue, we are close to the top of our rates, “advises Marek Mora.
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It is almost certain that rates will swing over four. “I think we will have to swing over four with our rates. There is no ceiling we do not go through. Sky is the limit, as the English say, “said the vice-governor.
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Back to two percent at the end of the year
The Czech central bank has been aiming for inflation at around two percent for a long time. “We will get close to the goal at the very end of the year, we will be at the goal at the beginning of 2023,” Marek Mora anticipates further development.
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The CNB was one of the first to start raising sharply. For example, the ECB does not yet address high inflation with rates: “We are in completely different conditions than the euro area average. We have an extremely low unemployment rate, we have a tense labor market, “says Mora.
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Would Mora accept the post of CNB governor? Isn’t the crown too strong now? And what growth does the republic predict for this year? See the full interview in the video above in the article.
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