Press conference of the CNB Bank Board

Transcription

1 Press conference of the CNB Bank Board th Situation Report on Economic and Monetary Developments 7 September 17

2 The monetary policy decision At its meeting today, the CNB Bank Board decided to keep interest rates unchanged. The two-week repo rate thus remains at.5%, the discount rate at.5% and the Lombard rate at.5%. Four members voted in favour of this decision, and three members voted for raising the two-week repo rate to.5% and the Lombard rate to 1.%. According to the current forecast, inflation will stay in the upper half of the tolerance band for the rest of this year and decline towards the % target at the start of next year. Following the August increase in interest rates, a further increase in rates over the next two years is consistent with the current forecast. The Bank Board assessed the risks to the current forecast as being slightly inflationary.

3 The external environment (i) Comparison between the current forecast assumptions and the September outlook based on Consensus Forecasts survey and market expectations for the effective euro area* current forecast 3 CF_ Consumer prices Producer prices GDP 3M EURIBOR (Annual changes in %) (Annual changes in %) (Annual changes in %) (in %) * Effective euro area means that the weights used in the calculations correspond to the share of individual euro area countries in total Czech exports into the euro area

4 The external environment (ii) Comparison between the current forecast assumptions and the September outlook based on Consensus Forecasts survey and market expectations current forecast CF_9 1.3 current forecast CF_ Brent oil (USD/barrel) USD/EUR

5 The inflation forecast and expected outcome in 17 Q3 5 Monetary policy horizon 3 Inflation target 1-1 III/15 IV I/1 II III IV I/17 II III IV I/18 II III IV I/19 9% 7% 5% 3% confidence interval 5

6 Producer prices (Annual changes in %) manufacturing producer prices market services prices construction work prices agricultural producer prices (right-hand scale) / / / / /17 7 -

7 The GDP forecast and outcome in 17 Q III/15 IV I/1 II III IV I/17 II III IV I/18 II III IV I/19 9% 7% 5% 3% confidence interval 7

8 Industry, construction and retail sales (Annual changes in %, s.a.) (Annual changes in %, s.a.) construction 1 retail sales total 15 industrial production 1 retail sales without automotive segment /13 1/1 1/15 1/1 1/17-1/13 1/1 1/15 1/1 1/17 8

9 Labour market (in %, seasonally adjusted) (Annual changes in %) share of unemployed persons 3 1/13 1/1 1/15 1/1 1/ wages in market sectors I/13 I/1 I/15 I/1 I/17 9

10 Comparison of actual domestic data with the CNB forecast 8 forecast 7, actual data 5,9,7 3,5,,1,,5 GDP (Q,17) Inflation (August 17) Average wage (Q,17) Share of unemployed persons (Q3,17) Notes: Annual changes in %, the share of unemployed persons in % (comparison of s.a. outcomes in July and August with the forecast for 17 Q3) 1

11 Risks to the current forecast The Bank Board assessed the risks to the current forecast at the monetary policy horizon as being slightly inflationary. Risks on the upside: faster growth in domestic wages and economic activity weaker-than-forecasted koruna exchange rate in the quarters ahead Risks on the downside: lowered outlook for industrial producer prices in the euro area lower food prices 11

12 Thank you for your attention Minutes of the today s meeting will be released on October 17 at