Dep Director Of Monetary Department Says Inflation Should Reach Single Digits In June/July

Deputy Executive Director of the CNB's Monetary Department Jakub Mateju gave an interview to CT24, expressing optimism about the CPI print for May and the prospect of continued disinflation.

• The official said that the decline in inflation is broad-based and is observable in core inflation, which is adjusted for volatile items. The central bank deems it "very important (...) that core inflation has reached single-digit values after a long time."
• According to Mateju, CNB staff "expect that in the coming months, perhaps as early as June or July, inflation should reach single digits and continue to approach our inflation target."
• "Perhaps the biggest risk for us right now is the energy situation in the coming winter." The last winter was relatively mild, which helped Czechia manage the increase in energy prices, but "there is a risk that next winter might not really be so positive."
• "Our forecast expects interest rates to gradually decline from current elevated levels in the second half of this year or towards the end of it," but the final decision sits with the Bank Board and many of its members said they would prefer to keep rates higher for longer than implied by the forecasts.