The international rating agency Moody's Investors Service has
downgraded its outlook for the Czech banking sector from positive to
stable. The change is mainly due to the slowdown in the country’s
economic growth, the Czech News Agency reports. Moody’s said on Monday
that after years of rapid loan growth, it expects a slight deterioration in
the quality of its loan portfolio in the Czech Republic.
The New York-based bond credit rating business continues to see the country’s credit rating as one of the best in Central and Eastern Europe, but it expects Czech GDP growth to decelerate from last year’s 2.9 percent to 2.7 percent this year, with a further 0.2 percent decrease in 2020.
Trust in the Czech economy experienced a slight increase in August according to the results of a monthly survey conducted by the Czech Statistics Office released on Monday. The rise is particularly thanks to greater optimism in the trade and services sectors. However, industry trust remains at a six year low and consumer trust has decreased.
Overall confidence in the Czech economy rose slightly to 95.6 in August
from 95.1 in July, according to the Czech Statistical Office.
Among Entrepreneurs, confidence increased by 0.8 points to 93.6 points, the lowest level in five years for the month of July.
Consumer confidence fell to 105.1 points in August from 106.4 the previous month, thus returning to levels recorded in May and June.
In annual terms, both consumer and business confidence is lower than in August 2018
Another long-term drought could cost the Czech economy up to 80 billion crowns, equivalent to a drop of 1.6 percentage points in GDP, according to a new study. Researchers at the University of Life Sciences warn that in order to conserve water for essential use, key industries would be forced to cut production, adding an exponential ripple effect to the surface-level economic impact.
The Czech economy is expected to grow by 2.6 percent this year, following a
3 percent expansion in 2018, according to the latest forecast from
For the coming year, the European Commission foresees growth of 2.5 percent, again mainly fuelled by solid growth in household consumption, with investment growth expected to ‘normalise’.
Private consumption is likely to remain the main growth driver and should continue to benefit from swift growth in wages and pension incomes, and robust consumer confidence, the EC said.
The trade balance is set to deteriorate over the forecast horizon and detract from GDP growth in 2019, before turning neutral in 2020, the forecast says.
The Czech Republic’s economic growth is expected to continue at a rate of around 2.5 percent, the International Monetary Fund predicted in a press release on Thursday. Inflation is expected to go down and unemployment levels will rise. The head of the organisation also warned of the large impact that American tolls on European products would have on the Czech economy.
The German Central Bank has published a prediction on the country’s expected economic growth for 2019. It lowered its expectations from 1.6 percent to 0.6 percent. The Czech manufacturing sector is very dependent on German economic strength and Germany is also the Czech Republic’s largest trading partner. However, analysts questioned by the Czech News Agency say that changes in the forecast were expected and will not affect the Czech economy.
The European Commission has revised its outlook for the growth of the Czech
economy this year downwards. It said on Tuesday that gross domestic product
was likely to expand by 2.6 percent in 2019, down from the 2.9 percent it
forecast in February.
The European Commission said it expected growth next year to reach 2.4 percent. Earlier this year it predicted a figure of 2.7 percent for 2020.
Officials also said they believed Czech unemployment would this year remain at 2.2 percent and would climb next year to 2.3 percent.
The Czech economy grew 2.8 percent year on year in the final quarter of 2018, above market expectations, revised data released on Friday by the Czech Statistical Office show. Analysts said it sent a positive signal that domestic growth remains sold despite a downturn in the Eurozone, and in particular Germany, the Czech Republic’s main export market.