The Czech National Bank has updated its economic and monetary assessment, reporting that Czech headline inflation remains among the lowest in the European Union at 1.3%, while core inflation stands at 2.8%. It cautioned that disinflation is not yet complete, with rising oil prices, refining margins, natural gas prices and electricity prices creating upside risks, including through higher administered prices in 2027 and 2028. Domestic growth has moderated slightly in 2026, although household consumption and fixed investment continue to expand solidly. The external backdrop is also improving as Germany’s economy recovers and industrial sentiment strengthens. Fiscal policy is expected to become markedly more expansionary, with the government planning an additional deficit widening equal to 1.5% of gross domestic product over 2026 and 2027, while higher long-term market rates have tightened financial conditions and reflect expectations of further policy rate increases.
Czech National Bank assesses inflation at 1.3%, flags energy prices and fiscal expansion as risks
The Czech National Bank reported headline inflation of 1.3% and core inflation of 2.8%, while warning that rising energy costs could delay the completion of disinflation. Domestic demand remains solid, but planned fiscal expansion and higher long-term interest rates are shaping the monetary policy outlook.