CNB Assumes Inflation Fell to Around 3% in January

Highlights from the policy statement:

• The Bank Board assumes that inflation fell to around 3%, i.e. to the upper boundary of the tolerance band around the target, in January.
• The Bank Board considers it necessary to persist with tight monetary policy and approach further rate cuts with caution. From this perspective, rates will be above the levels implied by the baseline scenario of the new macroeconomic forecast in this quarter and probably also the next quarter. Consistent with this scenario is a rapid decline in market interest rates in the course of this year.
• Average inflation is thus expected to be 2.6% in 2024 as a whole and 2% in 2025. However, core inflation is expected to be elevated this year, averaging 2.9%.
• However, household consumption will remain below the pre-pandemic level… According to the forecast, GDP will grow by 0.6% this year and accelerate to 2.4% next year.
• The Bank Board assessed the risks of the forecast and the uncertainties of the outlook as being broadly inflationary.

Click here to see the full policy statement.