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Consumer Confidence Pricing In Significant Downward Revision in Growth Expectations

  • This week, we saw that Czech consumer confidence fell to -26 in April, its lowest level since January 2013, as the renewed geopolitical tensions continue to weigh on the CEE region.
  • In addition, investors have also been concerned about the sharp tightening in financial conditions in the past 6 months, which is currently pricing in a significant deceleration in the economic activity.
  • Interestingly, we can notice that Czech consumer confidence has strongly led the business cycle by 6 months in the past two decades.
  • The chart below shows that consumer confidence has been pricing in a significant slowdown in the economic activity in the coming 6 months.
  • With a rising number of macro leading indicators pricing in a sharp downward revision in growth expectations, the pressure on policymakers has been rising ahead of the next meeting on May 5.
  • CNB deputy Governor Mora mentioned in an interview yesterday that he expects the 2022 growth outlook to be but markedly.

Source: Bloomberg/MNI

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