Prague - The Czech Banking Association (CBA) revised its economic development forecast to a 1.9 percent growth this year, and next year it expects a 2.5 percent expansion, the CBA said in an updated forecast today.
The economy contracted by 1.3 percent last year, it said in the estimate.
In its October forecast, the CBA expected a gross domestic product rise of 1.6 percent in 2014 and an increase of 2.4 percent for the coming year. They predicted a fall of 1 percent for last year. The estimate, however, did not take into account the central bank´s interventions in the currency market launched on November 7 with the aim to weaken the crown.
"It is premature to judge the impacts of the CNB´s interventions," said Ludek Niedermayer, chairman of the CBA Scientific Council. "It will depend on the external environment, on how long it takes to end the action as well as on the way it ends up," he said.
"The weaker crown will certainly improve exports that will be the main driving force of economic growth this year," Niedermayer said.
Unemployment will not apparently fall this year, according to the CBA. It will stagnate at 7.7 percent and will decrease to 7.2 percent next year.
The inflation projection is 1.2 percent for this year due to the annual rate falling to around zero early this year over falling energy prices and other factors, among them cancellation of health fees.
The CBA publishes economic forecasts on a quarterly basis taking into consideration estimates of analysts from the following banks: CSOB, Ceska sporitelna, Raiffeisenbank, UniCredit Bank, Komercni banka, GE Money Bank and Citibank.
|GDP development in pct||- 1.3||1.9||2.5|
|Inflation in pct||1.4||1.2||2.3|
|Growth of bank loans to households in pct||4.1||4.7||5.5|
|Growth of bank loans to (non-financial) businesses in pct||2.2||4.3||6.5|