Experts Weigh In On CNB/Gov't Blame Game Over High Inflation

Seznam Zpravy ran a piece citing several Czech analysts and businesspeople who weighed in on the discussion over the role of fiscal and monetary authorities in fuelling inflation to its current levels. The experts interviewed by the newspaper attributed blame to the CNB and its reluctance to raise interest rates.

• Last week's monetary policy decision sparked the debate, with the central bank and the government trading barbs over inflation. The CNB kept interest rates on hold but flagged loose fiscal policy as a key hawkish risk and said that it may have to tighten policy in the absence of a credible austerity package. Prime Minister Petr Fiala subsequently said in an interview that it is the responsibility of the central bank to ensure price stability.
• Alongside flagging risks stemming from fiscal policy, the CNB last week tuned up hawkish rhetoric, while at least two policymakers switched their votes to a 25bp rate hike. More details will be available in the minutes of the meeting, due for release this Friday.
• Czechia's government is finalising an austerity package, which could be unveiled as soon as tomorrow. Finance Minister Zbynek Stanjura said this morning that the government will "do all it can" to meet its budget deficit goal for this year and trim next year's shortfall by CZK70bn.
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