Czech Republic: The CNB to cut further in 2020 – Standard Chartered

Economists at Standard Chartered Bank expect the Czech Republic’s growth slowdown to accelerate sharply in 2020, resulting in the country’s first annual GDP contraction since 2013. EUR/CZK is sitting at 27.572.

Key quotes

“We forecast growth of -2.2% in 2020 (2.1% previously) and then 1.6% in 2021 (2.2% previously). Our 2022 forecast is unchanged at 2.2%.”

“The Czech National Bank (CNB) cut its repurchase rate by 75bps on 26 March and we see scope for a further 50bps of cuts by the end of 2020 taking the rate down to 0.50%.”

“We see scope for rates to normalise in 2021, and so forecast the repurchase rate rising back to 0.75% by end-2021.”