Czech Inflation Rate Expected to Rise in 2022

By: The Quinnipiac University Economics Research Team, Nicholas Ciampanelli

According to the Czech Ministry of Finance, the Czech economy grew by 2.5% and inflation increased by 3.8% in 2021. The Ministry also projected that the economy will grow by 3.9% and inflation will increase by 5.5% in 2022. Economists warn however that inflation may exceed 10% if the value-added tax on energy is not lowered. This is based on the belief that electricity and natural gas prices are significant contributors to inflation through their effect of raising a wide range of consumer goods’ prices. Despite this possibility, the strengthening of the Czech Koruna may offset some of the market effects of inflation and some economists optimistically project that inflation could fall back to approximately 2% in 2023.

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