According to the chamber, the result confirms the gradual stabilization of the development of the price level in the Czech Republic. At the same time, he refers to the development of inflation, the year-on-year level of which, according to the Czech Statistical Office, slowed down to 2.1 percent in November, which is the lowest value since April this year.
Compared to the previous month, prices fell by 0.3 percent. According to analysts, the easing of inflation was mainly due to food price developments. The Czech National Bank (ČNB) pointed out that it is important that it also permanently slows the growth of prices in the service sector, which remains elevated.
450 companies across all regions and sectors of the economy took part in the chamber’s survey in autumn. The majority of businesses stated in it that they do not expect a significant increase in the price of their products from the beginning of next year.
According to the chamber, the November inflation and the results of the survey are a signal that the development of consumer prices is gradually returning to normal.
“In the chamber’s macroeconomic forecast, we expect that inflation for the year 2025 could correspond to 2.5 percent. The incoming macroeconomic data are in line with this estimate. The slowdown in inflation also creates room for growth in real wages and contributes to strong household consumption, which, according to our forecast, will be the main engine of economic growth in the next year as well,” said Zdeněk Zajíček, president of the Chamber of Commerce.
For next year, the chamber’s macroeconomic forecast predicts average inflation of 2.3 percent and wage growth of around 2.7 percent. “At the same time, our forecast expects that in 2026, corporate investments and a slightly positive contribution from foreign trade will be added to household consumption,” added chamber analyst Roman Renda.
In the European comparison of the development of inflation in November, the Czech Republic improved by five places, when it had the ninth lowest inflation of the 41 monitored countries, according to the analysis of the Portu investment platform. In November, Romania had the highest inflation of the European Union countries at 9.8 percent. In contrast, there was year-on-year deflation in Cyprus, when consumer prices fell by 0.5 percent.
The CNB will probably not move the rates
According to the CNB’s November forecast, average inflation should reach 2.5 percent this year. Next year, the central bank expects it to be relaxed to an average of 2.2 percent. Last year, average inflation was 2.4 percent, but in 2023 and 2022 it exceeded 10 and 15 percent, respectively, mainly due to the sharp rise in energy prices.
The central bank’s main mission is to tame inflation. According to analysts, the CNB Banking Council will not change interest rates at its last meeting of the year on Thursday. According to them, inflationary pressures still persist in the economy, which make it impossible to lower rates, but on the other hand, there is now no reason to increase them. The base interest rate is currently 3.5 percent, and has been at this level since the beginning of May.
Jakub Matějů, Deputy Director of the Monetary Section of the CNB, stated a few days ago that the inflationary risk is the continued increase in the price of services. “The imputed rent continues to contribute to year-on-year growth, whose year-on-year dynamics is not slowing down and reflects the strong demand on the real estate market and, apparently, the already limited capacities of the construction sector,” he pointed out.
