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CZECHIA: Goldman Sachs See Limited Impact of Sept CPI on MonPol

CZECHIA
  • Goldman Sachs say that while the rise in inflation in September is notable, they think its implications for monetary policy are limited. The composition of the print is significantly more sanguine than the headline number suggests: the increase was driven by food prices and core inflation fell below the CNB's forecast, they say.
  • Moreover, GS think the seasonal rise in food prices throughout the summer in the Czech Republic (and the broader CEE region) will normalise going into Q4.
  • They maintain their forecast for the CNB to continue cutting its policy rate by 25bps at the remaining two meetings of the year.
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  • Goldman Sachs say that while the rise in inflation in September is notable, they think its implications for monetary policy are limited. The composition of the print is significantly more sanguine than the headline number suggests: the increase was driven by food prices and core inflation fell below the CNB's forecast, they say.
  • Moreover, GS think the seasonal rise in food prices throughout the summer in the Czech Republic (and the broader CEE region) will normalise going into Q4.
  • They maintain their forecast for the CNB to continue cutting its policy rate by 25bps at the remaining two meetings of the year.