Conditions in manufacturing have deteriorated for the fourth consecutive month, which can undoubtedly be viewed as a negative signal for the economy when looking ahead. Although below the expansionary threshold, the PMI is nowhere near the depressed 2023 levels. Should the hard times continue, an adverse effect on growth in 2026 is a possibility
Retail sales added 3.5% annually when adjusted for price effects, coming in above market expectations. Households have enough resources from solid wage growth in the first half of the year. Nonetheless, sentiment will be the key when looking ahead, as the external environment becomes wobblier
Unprocessed food was mainly responsible for Czech headline inflation ticking lower. Meanwhile, pricing in services remains robust, and may affect inflation expectations. One softer-than-expected inflation print is unlikely to alter the central bank's hawkish stance. We'd need to see more relaxed core inflation and disinflation in services first
August’s PMI remained in the contraction zone, as supply chain issues dampened output. However, new orders increased, and confidence remained upbeat. The Czech economy appears poised to hum along smoothly, with no need for loose monetary policy
The Czech economy expanded by a solid 2.4% annually at the beginning of the year. The real GDP revision supports our view that households remain on a spending spree, while firms remain reluctant to unleash investment and unlock future growth potential. Resilient spending will likely prevent any further monetary policy easing
