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Hungary’s industry downturn deepens before tariffs come into play
14 hours ago
Czech consumer prices (inflation) rose by 2.7% year on year and by 0.1% month on month, according to the flash estimate released by the Czech Statistical Office (CZSO).
Despite the stagnation in the y/y growth, local analysts showed dismay with inflation staying above the 2% Czech National Bank (CNB) target and warned against price growth in food and services.
“The problem is that the end of food inflation is not in sight, and every new month can bring some new surprise,” the head economist at Banka Creditas, Petr Dufek, was quoted as saying by the Czech Press Agency (ČTK).
Dufek pointed to “the escalating serious veterinary issue” of the foot and mouth disease, which spread from Hungary to Slovakia last month, and Czechia has been intensifying its control measures on the Slovak and Austrian borders to prevent further spreading.
Prices of food, alcohol and tobacco increased by 5.9% y/y and by 0.8m/m. Prices of unprocessed food increased by 9.3% y/y and by 1.8% m/m.
ING’s chief economist for the Czech Republic wrote in a comment that he expects the current CNB interest rates of 3.75% “to be pushed to 3.25% in two moves in the May and August meetings,” pointing to “downside risks to economic performance” also in connection to the negative impact of the imposed tariffs on the Czech export-oriented economy.
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