COMMENT: Rising prices in the Czech Republic have almost no competition in the EU. But the end of the inflation drive is in sight


It is just an unwanted icing on the cake that the Czechia is, unfortunately, one of the “worst” countries in the European Union, where price increases are growing faster than it would be healthy and than in most member states of the union. And to have all that information about inflation together, consumer prices rose by 1.8 percent month on month (in April), and most importantly – literally catastrophic numbers (after all, the reality is still 0.4 percentage points worse than estimated by the Czech National Bank, which in the job description to monitor the stability of prices and currencies) inflation was mainly affected by higher prices of housing, food and soft drinks.

This housing is interesting, not least because despite the warnings from real estate experts that people do not take out mortgages on overpriced real estate (so let’s ask if everyone really needs to live now, or is it the greed and vanity of owners to slam for sale what is it going the most?), the demand for housing loans is literally about life.

Of course, we can also repeat the catastrophic words about how negative inflation is having a negative impact on people’s lives, what all they take away from them, what percentage of the population is at risk of poverty because of that, and so on. But – even all this, simply put, does not give a clear answer as to why and what and how long it will really take. The reasons and causes of rapidly rising inflation are generally known, but not so quickly it can be fixed. And in those repairs, the proverbial “detail” that can make a mess is buried.

As you probably know, there is not just one, the “right” way to get the Czechia out of hellish inflation, quickly and painlessly. To put it very simply, the solutions can be, as usual, two: Either still be in raising the country’s key interest rates (which is supposed to limit everything that can be measured by raising prices), or not, because the previous strictness could knock the country down. into recession and then woe. And now choose from it, dear Watson, the legendary book detective would say. Everyone has their pros and cons, sometimes more, sometimes less. And every solution has its staunch supporters and its staunch opponents. Oh yeah, you’re sure to talk to me.

And there is another one – the seriousness of the situation is not just in the implementation of high-price solutions. High inflation, as shown by the latest events surrounding the campaigns before the upcoming municipal elections, but also the presidential election, has a significant effect on the possible choice of winners of these elections. And unfortunately, as is the case in these parts, people do not choose in them according to who is (or definitely was) for the country “Best in.” , revenge.

And if I follow up on the previous ones, the labels on the roads say that under Andrej Babiš, who led the government cabinet for four years and before that, he and his movement were actively at the helm for another term and by the way, he started today’s inflation significantly and did nothing against it, he is not happy to regain any significant executive functions. Regardless of the real life complications, people who may have really serious problems due to rapidly rising prices.

Perhaps better news is that Komerční banka’s economists say in their inflation analysis that it should peak “between June and July, between 15% and 16%.” “However, the very dynamic development of prices in recent months shows that our estimate is associated with a high degree of uncertainty,” states the analysis of Komerční banka. And as usual, this view has its preconditions. The most important of these is that the significant increase in the CNB’s interest rates so far will finally begin to manifest itself in a slowdown in so-called core inflation.

And so you don’t think everything is as they say, so this week we can quickly see if the wheels of inflation are spinning even faster than before or not. The president, who, by the way, cannot name up to 80 percent of the Czech population, not least because of his long-standing submission to Russian President Vladimir Putin and other totalitarian rulers, is expected to have an important trump card up his sleeve at the end of his political career. It is in these times that he is to appoint another central bank governor. Uff, you say, well, well. So he wants the future price and currency stability watchdog not to be from another planet, if you want a “UFO”, but a man who will, let’s believe it! things even around inflation, okay.


Source: EuroZprávy.cz by eurozpravy.cz.

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