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POLAND

2023 Breakeven Inflation Reaches 3.9%

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  • Covid cases continue to gradually decrease with the 7D SMA of daily new cases dropping to 2,000 (and down from 12,300 from its early March highs). Therefore, the Czech government approved the reopening of primary schools on May 3 and all stores from May 10.
  • On Friday, Czech economy contracted 0.3% in Q1 from the previous quarter and declined 2.1% YoY, which was slightly better than expected (-2.6% YoY exp.). Despite the significant drop in the economic activity in the first quarter (due to the worsening Covid19 situation), economists are still expecting Czech GDP to increase by up to 4% in 2021.
  • The CNB is expected to keep its benchmark rate steady at 0.25% on May 6 at 0.25% and in order to maintain financial conditions as loose as possible to stimulate the economy. Discussions over rate hikes will likely start in August with sell-side institutions pricing in 1 to 2 hikes for H2.
  • March retail sales will also come out on May 6, expected to rise by 15.8% vs. -4.9% the previous month.